Filed by CBOT Holdings, Inc.
                   Subject Company--CBOT Holdings, Inc.
                   Pursuant to Rule 425 under the Securities Act of 1933
                   File No. 333-72184

                                    * * * *

The following is a transcript of a meeting of the CBOT membership held on
March 14, 2002,which is currently available for audio replay on the
CBOT's intranet site, MemberNet.

CBOT - Candidates' Forum

[male] While CBOT Holdings, Inc., CBOT Holdings, has filed with the SEC a
registration statement on form S4, including a preliminary proxy statement and
prospectus regarding the restructuring of the Board of Trade of the City of
Chicago, Inc., CBOT. It has not yet become effective, which means it is not yet
final. CBOT members are urged to read the final registration statement on form
S4 including the final proxy statement and prospectus when it is finalized and
distributed to members, as well as the other documents which CBOT Holdings or
the CBOT has filed or will file with the SEC. Members may obtain a free copy of
the final prospectus when it becomes available and other documents filed by
CBOT Holdings or the CBOT at the SEC's web site at www.sec.gov
                                                   -----------

John: Welcome fellow members, ladies and gentlemen, to the candidate forum for
the 2002 election cycle here at the Chicago Board of Trade.  I'm going to
do as little speaking as possible. I have a few opening housekeeping items and
then I'll introduce the candidates.  Charlie Carey, candidate for vice
chairman, will have a brief period of time to give a presentation even though
he's running unopposed, not that we should be delighted about that, but it's
always good to get information from upstairs. After that candidates for full
member director and associate member director will each have 2 1/2 minutes for
an opening statement, at which time we'll revert to a Q and A. The
nominating committee

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has developed a few brief questions that we'd like all the candidates to
answer, and after that we'll take Q and A from the audience.

For your information, C.C. Odom, a candidate for full member director,
non-resident, three year term, is not able to attend today's forum. When the
time comes I will read the statement for C.C. Odom. C.C.'s mother has been
stricken and is in critical condition I understand. He's unable to attend
today's meeting.

Another candidate for full member director, non-resident, Walt Weisman, is not
present in person, but will be monitoring the proceedings through Membernet and
even though he has chosen not to make a statement in the opening remarks, he
will be available should anybody have a specific question for him.

A couple of little housekeeping items that we'd like to clarify. I'm sure
everybody's received their ballot. If they have not, call Paul Draths in the
secretary's office and request one. When it comes to the full member director
category, the annual election includes three positions for full member
director, three year term. There are five candidates, three resident and two
non-resident, for these positions. You may vote for any three of the
candidates in this category. Your vote in this portion of the ballot will not
count if you vote for more or less than three candidates. Under the CBOT
charter the candidates in this category who receive the three largest vote
totals will be elected. Unless there is no non-resident candidate among the
first three. In this case then the

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non-resident candidate who places next in the voting will be elected instead of
the resident candidate who places third. It is possible to elect two
non-residents in that category if they are among the top three vote getters.
There have been a lot of questions about that. It's been a long time since
there has been more than one non-resident director candidate, but we have
clarification from the secretary's office and from the legal staff that that's
the way this will work.

Similarly, there used to be a big line of people voting in the lobby outside,
and that's been replaced by the proxies which everybody has received. Now if
during the course of this forum, or at any point before the votes are counted,
something occurs that makes you change your mind about how you voted, you may
call and ask the secretary's office to send you a second proxy and vote that.
The latest dated proxy ballot which any voting member submits will be the
ballot that is counted. So even though there will be two ballots at the
secretary's office, the one with the later date is the one that's counted.

If you already have submitted a proxy ballot and wish to change your vote, you
may do so by filing another later dated proxy ballot. If you have any further
questions, call Paul Draths or Gloria at the secretary's office. They are most
competent and will be able to answer any questions you have.

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Without further ado, I'd like to introduce the candidate for vice chairman of
the board this year is Charles Kerry. The candidates for full member director
are Jack Callahan, Jake Morowitz, Alan Zatopa, Gary Sagui, and C.C. Odom. The
candidates for AM director are Howard Feiler and Andrew Wallace. And without
further ado I'll turn this over to Charlie. Charlie give a brief opening
statement.

Charles Kerry: Thanks John. I'd like to thank you, the members, for coming out
today. It's a process that's important to us and even though I'm unopposed, I'd
like to basically explain a couple of things that have taken place in the past
two years and the way I feel about some of our exchange finances going forward.

When you elected me to this position two years ago, we were $100 million in
debt. We had over 900 employees and we were spending money to build out our
electronic platform, the ace platform. In fact that cost us over $50 million in
commitments. Our resources were strained to the point where it was limiting our
ability to adequately fund order routing and any other enhancements to
technology that would support our open outcry platform.

A period of declining volume and revenues ensued which depleted our cash
balances and threatened the financial viability of this organization. Your
finance committee, with myself as chairman, was forced to take tough but
necessary action to remedy the situation. I think you all know, we had to re-

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institute dues, raise fees to the members, and cut expenses. We could not have
done this without your support.

The good news is today we have trimmed our staff by a head count of over 200.
We currently have $50 million in cash on hand. We are now supporting our open
outcry platform with capital expenditures in excess of $7 million this year.
And the 2001 financial results demonstrate a profit of $19 million.

Our association is, and will continue to be, in a financially sound position.
These accomplishments have not been achieved without some burden to the
membership. We need to reexamine our fee structure and find a way to lower the
cost to you, the members. Our members are our greatest asset. Our liquidity
providers and our floor brokers continue to serve the needs of the marketplace.
And I'm pleased to report that we are averaging over a 1.5 million contracts
per day this month. We recently set a record of over 500,000 contracts on the
ace platform in one day. This would not be possible without you, the members.

We continue to face complex challenges, the marketplace is not standing still.
We must remain vigilant so that our exchange, our products and our liquidity
providers continue to serve the needs of the marketplace.

As vice chairman I pledge to continue this work. Thank you.

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John: Before the start of today's forum, the candidates for full member
director and candidates for AM director drew numbers from a hat and that
determines the order in which they'll be speaking. When we start the Q and A,
we'll start with one candidate and work our way down and then rotate as we go
through the question and answer period. Back Callahan was number one, and I
won't do these introductions after that, they'll just go until Gary Sagui, at
which point I will read C.C. Odom's statement and then Howard Feiler and Andy
Wallace. So, Jack Callahan. You can stay there, just grab the microphone.

Jack Callahan: Thank you John. I'm also number one on the ballot, I would like
to point out. I appreciate the opportunity to address the membership in this
forum. While many of you know me and have worked on various committees, I would
like to take just a moment to highlight my involvement with change at the CBOE
and the Chicago Board of Trade.

Over the past 20 or so years, I've been a catalyst for change through
participation in numerous committees and task forces. Most prominently the CBOE
new building committee, it's technology task force. It's modified trading
system task force. It's screen based trading system task force. And the joint
advisory committee for the Chicago Board of Trade and the CBOE.

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Through these experiences I feel that I have a clear vision of what the CBOT
should be as we enter the early 21st century. The Board of Trade must be
positioned to make its products and services much more accessible to the
outside world. And be in control of its own destiny.

As you well know, we are on our way with a restructuring plan that hopes to
accomplish these same goals. At this juncture we are entering a critical phase
of the restructuring process. And it's going to take a strong board of
directors with the right experience, with the CBOT management team in making
the right decisions and taking the right steps to successfully complete this
program over the next six to 12 months.

I am confident that I have the experience and the perspective to be an
effective member of our board during this important period of change, and I
will be guided by four major beliefs.

One. To be an independent director who will hold management of the exchange
accountable for the interests of its owners.

Two. To take an active role in monitoring the implementation of the S4 filing
and to assure that core rights are fully respected.

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Thirdly. To visionally preserve this CBOE exercise right, and the terms of the
recent 2001 agreement.

Finally, to replace existing technology with systems of which we have control.

In summary, I believe that we should continue down the road toward
restructuring, as long as we accomplish the four points I just mentioned. I
look forward to the opportunity to elaborate during the question and answer
period.

I'd like to close by relating an experience with the Chicago Options Exchange
technology task force in 1992. The prospects were daunting and mind bending.
The committee adopted the slogan of the Evanston marching kazoo band, which is:
we don't know where we're going, but we're already on our way. In the near
future I hope that this institution can say that we knew where we wanted to go,
and we got there. Thank you.

John: Thanks Jack.

[male] Somebody told me earlier today that 2 1/2 minutes is too short for
anyone to tell anybody anything. But I'm going to give it a try. I want to
thank the nominating committee for their confidence in me and for nominating
me. This election, like all the other elections we have, is the exercise of our
most important prerogative. While there shouldn't be a specific litmus test on
any

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one issue, certainly not in a theoretical one, principles are important. Beyond
principles effectiveness is important. And by effectiveness I mean skills,
knowledge, ability to vocalize and press questions. Willingness to seek
solutions. The ability to do a job that is more than voting yes or no on a list
of static issues. Things change, details change. The ability and willingness to
seek and find solutions is the key.

Principles. I believe that all of our value comes from our volume. Our volume
comes from our liquidity and from our order flow. What truly distinguishes us
from all other exchanges, and from all other electronic platforms, is the depth
and breadth of our market makers on a trade by trade level. This means our
locals. It doesn't mean that we don't have to meet the needs and the desires of
those that bring the order flow, we must do that as well. I believe in open
outcry. I believe it is best for us as members. I believe it is best for our
customers. I believe that sophisticated users know this and with few exceptions
prefer competition between brokers and between locals. I believe in honestly
supporting both platforms, ace and open outcry. And in the final analysis
letting the customers decide.

I'd like to reiterate some of the bullets that I put in my letter that I hope
you've all read. I promise to demand that we continue to operate frugally and
aggressively. I promise to demand that our technology solutions focus on
efficiency and growth. I promise to demand that our floor population gets the

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support and fee structure that will encourage their participation. I promise to
demand that our members will not be disadvantaged to non-members with reference
to access or fees to any of our platforms. I promise to demand that customers
can expect and get faster order flow and entry verification. I promise to
demand that those firms that bring their customer business here can expect more
cost efficient and secure ways to do so. I promise to demand that our clearing
corporation is more attentive toward our strategic needs. I promise that we'll
pursue a closer relationship with our cousins across the street at the CBOE. I
promise to demand that we explore all relationships that are mutually
beneficial with other exchanges. I promise to be vigilant, involved and true to
the principles that I have enunciated. Thank you.

[male] I want to thank the nominating committee for their confidence in me and
for the opportunity to be here. This is an important meeting with a lot of
things to discuss.

After the elections on the 28th, the new board is going to have to deal with
very complex issues. The most important of these is the restructuring issue and
membership vote to approve it. If elected I would vote against putting the
present proposal to a member vote. And if it is, I would encourage the members
to turn it down. There are a variety of reasons why I feel this and I'm going
to list three here today.

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The first is the potential equity dilution and potential loss of member value.
This proposal gives the board at its sole discretion the right to issue new
stock to employees, other unnamed persons and themselves for that matter, and
this proposal says that they currently expect to do just that. This type of
authority is without precedent at this exchange. I believe the membership will
find this unacceptable and you will vote it down.

The second is the significant loss of member control in this proposal. I'm
referring to the elimination of the petition process and the replacement of the
member nominating committee, they're replacing the member nominating committee
by the board of directors nominating committee.

These two changes together could foster self perpetuating administrations and
further erode membership control and probably member value.

And thirdly according to our chairman in his recent letter, the minority suit
is still unresolved and it makes no sense to go to a vote until that is
resolved in any event.

Another issue facing the board, and it's a big issue with EUREX, and how do we
move our technology forward. Is it with them or without them. And what steps do
we take to make sure we are always competitive in the electronic world.

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And lastly I'd like to address the lessers who look to their payments for
current income. Right now we have a glut of unleased seats. It's 49 the last I
looked. And this is the highest number in memory, and probably the highest
number of unleased seats we've ever had. There's two ways to try to help this
problem. One would be to reduce or eliminate dues. Lastly, changing the way we
hold our seats. Right now the trading groups over on the CBOE cannot put their
guys on our seat by virtue of the way that we hold them. If we change our
Bylaws we may be able to change that.

In closing I want to say what a good job our chairman and president has done.
After some tough going, we're now in good financial shape, but there is still a
lot of work to be done to keep this exchange strong and competitive. Thanks for
the opportunity to be here.

[male - Gary Sagui] First of all, many thanks to the nominating committee and
the many members that have given me kind words of support. Let's cut right to
the quick. I'm in favor of the proposed demutualization so long as changes are
made so that chairs cannot be issued to anyone other than present members
without a positive vote by those same members.

I must also be convinced that a distant slate of directors can run a vigorous
campaign for a modest amount of money. Demutualization to me is not about

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having an IPO and making a quick buck on a stock trade that dilutes our
control. It's about running our exchange more efficiently.

As an example, let's look at just two important issues that face us.
Electrifying open outcry and developing the next generation of electronic
platform. Both of these projects have to be done. Both will cost tens of
millions of dollars. We all want to share these costs with at least one other
exchange. Unfortunately as a member run organization, our record of working
with other exchanges could not be worse. The case could be made that as a
member run organization, we will have a hard time getting any exchange to
negotiate seriously with us on any project of mutual interest. We might have to
demutualize just to send a signal to other exchanges that we have the will and
the ability to close on joint ventures, mergers or any other dealings that
favorably impact us.

I agree that there's going to be consolidation in our industry and that those
exchanges that participate successfully in this process will attain economies
of scale that give them a significant competitive advantage. Demutualization
appears to be a precondition for participation in this process.

Finally, in the time I have left I'd like to talk about block trading. Block
trading is the internalization of order flow that allows the FCM to negotiate
with the customer and take the other side of his order at a price that might be
outside the bid ask spread. A broker or local that engages in this practice in
the pit will

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be sent to jail. Exchanges are under incredible pressure by the FCM community
to legalize this practice. Many exchanges have capitulated. The Board of Trade
must stand firm. I am hard pressed to identify anything that could be more
detrimental to the value of your seat and your ability to make a living than
block trading, should it become widespread. If I'm elected and block trading is
approved for any contract on any amount, I will consider my tenure as a
director to be a waste of time.

I have a packet here that gives my written record on a number of exchange
issue. Anybody that wants to is welcome to pick it up after the forum. Thank
you.

John: Thank you Gary. Now I have been asked by C.C. Odom to read his statement
and understand I was going to wear the French cuffs today and have my hair
done, but C.C.'s in a lot better shape than I am so I thought I'd just skip all
that. For C.C. Odom.

My statements today will reflect what I consider to be priority issues,
complexities and challenges that currently face the exchange. Most of these
priorities were brought forward in my candidacy announcement letter. Time
allocation for this part of the forum will not allow for in-depth discussion on
each of these issues, however, I will be happy to discuss any or all of them.

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I'm sure you can contact C.C. by e-mail or through Trade Talk or Membernet.

The following statements represent my issues of priority status.

Number one, first and foremost is member opportunity. I consider this to be the
ultimate infrastructure and ballast for the exchange. Member opportunity is the
nexus that will guarantee continued success. Without it a question must be
raised as to the viability of the institution.

Number two, restructuring and its attendant debate demands that a clean S4 be
presented which represents our current and future business plan and business
model. Issues such as stock dilution, core rights, governance and a member
petition process must be subjected to further intense due diligence.
Consideration of calling the question on demutualization must be deferred until
all pertinent questions have been satisfactorily answered.

Number three, there are realistic threats from outside competition as well as
from internal sources that represent unlimited capital commitment,
non-competitive fee structures, pre-execution discussion, block trading and
internalization of order flow. We must maintain the integrity transparency and
liquidity of our markets.

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Number four, state of the art technology innovations in all exchange sectors
must be instituted as quickly as possible within realistic time constraints.

Number five, the minority membership litigation must be resolved to the
satisfaction of both parties with diligent speed. Continuance of this suit will
prove to be destructive to the plaintiffs as well as to the defendants.

Number six, our total exchange volume level must be continuously increased and
quantified by standards that reflect successful business practices.

Number seven, parity consideration and support for both the open outcry auction
and trading platform as well as for the electronic trading platform must be
maintained. Market participants should be the final arbiters in platform
preference.

Number eight, new products must be created, launched, property marketed and
energetically supported by the membership to realize continued exchange growth.
Successful new products will also aid in sustaining member opportunity.

Number nine, a business environment must be maintained that will ensure maximum
potential for increases in membership values. The same

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environment is needed to ensure demand for leases and a lease income that is
equitable, proportional to the amount of membership capital at risk.

And last but far from least there needs to be the continuance of the unity that
is being realized between the active trading community and the lessor
community. These two sectors are definitely joined at the hip and their
respective successes and failures reflect equally upon each other.

In closing let me state that I will work diligently to address and successfully
resolve the aforementioned issues. For those members who are present today or
who might be listening via Membernet, thank you for your interest and
consideration. And then many thanks go also to the nominating committee for
providing this candidates' forum. That's the end of C.C.'s statement.

Now we'll hear from the AM director candidates. Howard Feiler will be first and
Andy Wallace is second.

Howard Feiler: For those of you who do not know me, my name is Howard Feiler.
I'd like to thank the nominating committee for selecting me. And additionally,
I'd like to thank the many members that gave hours upon hours of their time to
prepare me for the responsibility of running for director. I could not have
done it without you, and I thank you.

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I'm a broker in the 30 year bond pit. I started at the exchange in 1988 and
have been a member since 1990. Serving on the membership committee for three
years and the treasury bond pit committee for the last seven years. I was with
Lehman Brothers as a vice president through 1998, and have been an independent
ever since.

I choose to work on the floor because I believe in what we are doing and the
magical culture in which we conduct ourselves. We are not obsolete unless we
choose to be. Now, I don't think anyone will deny that electronic trading is
here to stay. The problem I have is the way in which we as an exchange are
escorting the market onto the screen at the expense of open outcry. This is our
exchange. And until we restructure, thereby giving up the considerable control
we now have, it is not too late.

The major issues for me are the S4 restructuring agreement and how if enacted,
it will cause management to work for the electronic platform at the expense of
open outcry. If we are truly going to let the market decide where to trade,
then resource allocation and strategic initiatives must be balanced. I want to
be a director to ensure that open outcry gets a fair chance, even if it's less
profitable at the exchange level. Member profit centers must matter.

In order for this institution to realize its full potential, we need to create
a robust exchange where a customer driven product mix, liquidity, and

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accessibility combine with a triple A credit rating to attract the order flows.
This can be accomplished within a corporate structure without ignoring member
profit centers. This is what I'd like to work towards. Give me a chance. I
won't let you down. Thank you.

Andrew Wallace: Hello. My name is Andy Wallace and it has been an honor to have
served as the AM director for the CBOT over the last three years. This period
has been one of great change and I believe that my background and experience
has helped to move us in the right direction.

During these three years, I have taken my position as director seriously. A
board member owes a moral and fiduciary responsibility to guard against undo
risk, determine priorities, and generally direct the CBOT's activities. We set
the policy for the exchange and are entrusted to guard that executive
performance faithfully serves these policies.

The membership demands that a director be independent and have the courage to
stand against decisions that are not in the best interests of the membership.
Let me give you a few brief but important examples of how I've shown such
leadership.

First, in 1999 I was one of only two board members to vote against the 2000
budget. I made it clear to the board that more spending cuts were needed.

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When chairman Brennan added me to the finance committee, I used my finance
background to direct staff to make aggressive cuts and make some difficult
choices including raising member fees. And after two years of negative income
and low cash balances, the exchange is now back in the black with over $50
million in unrestricted cash balances at the end of 2001.

Second, in the fall of 2000 while chairing the options market maker task force,
we drafted a letter to the board that demanded that policies be changed for
electronic trading. This policy strictly limited pre-execution discussion and
trading against customer orders. At the time this was completely contrary to
what electronic exchanges were doing around the world, and I had to stand in
front of audiences both here and in New York and listen to their abuse that we
were pushing this exchange in the wrong direction. By standing fast I feel we
helped preserve what the CBOT stands for. A free and open marketplace that
allows for competitive price discovery. It's popular to stand up for
pre-execution discussion today, but 11/2 years ago I stood when the exchange
needed it.

Lastly, I chaired the pricing task force in 2001 which recommended that price
changes for customers on ace trades be raised to levels near the open outcry
which would reflect the economic benefit that they deliver. Again, some critics
howled that we were heading in the wrong direction, but from this
recommendation the staff developed a new pricing strategy that has been

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implemented this year that reflects this charge and keeps open outcry from
being put at a competitive disadvantage.

I have a track record for listening to the members and working with all
constituencies and standing in front of the tide in important times. Not all my
decisions have been right and I hope that I have a chance to answer some
questions at a later time. I pledge I will continue to listen to the members
and make decisions that reflect the gains that we have made including
restructuring. I believe we're moving in the right direction and with the
support of the chairman, I hope to continue as your AM director with your
support and vote.

John: Thank you gentlemen for those introductory statements. During the course
of conducting the traditional nominating committee meetings, the nominating
committee gets to hear from all sectors of the exchange. And based on what we
heard in those meetings, we've developed four or five questions based on what
pretty much seem to be the concerns and the problems that we face today. We'd
like to have the candidates all answer these questions and then we'll take Q
and A from the audience. We'll start with, Jack Callahan will answer the first
question first and then it will rotate for every succeeding question. Gentlemen
we'd like your answers clearly to be as succinct and to the point as possible.
We won't be keeping time on this but if somebody decides that they want the
podium here, he'll have to wrestle me for it.

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The first question regards the S4. Jack, have you read the latest version of
the S4 as is currently configured, is the restructuring pointing the CBOT in
the right direction and why?

Jack Callahan: I have read the S4. I think it's a blueprint for the right
direction for the Board of Trade. It'll make us more efficient, more
competitive, more flexible. The filing contains many checks and balances to
reach the ultimate goal. Additionally there are many speed bumps in there
naturally. We have the regulatory process slows things down. We're dealing with
a minority lawsuit which is very important to have resolved before we continue.
These natural speed bumps gives a chance to continually reassess as we move
along. But I believe that the S4 has pointed us in the right direction.

John: Thanks Jack. Jake.

Jake Morowitz: Yes, I've also read it. I have been an early and frequent critic
of the absolute need to demutualize. And if you recall my words years ago, I
was an early critic for the need to demutualize. I don't think that we needed
it to get a new staff in. I don't think that we needed it to make our
management process better. But I have heard and believe two reasons why we do
need to demutualize.

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One is the ability to consolidate either to buy or merge with another exchange
if that happens. It can only be done on a stock basis. And the second one, if
and when we have positive cash flows through a period of time, it's the only
way to move that cash flow to the membership. Lowering fees when that point
comes, is only part of the solution. If the cash flows continue to be positive,
we need to have a mechanism to distribute those cash flows to the membership.
Demutualization will do that.

In regards to the specific S4 that we have right now, I think that all of the
criticisms and all the positive things are all true. The question is, do we
want the membership to vote on it. Do we want to continue to tinker with it
until a vocal minority or a majority of those that speak up talk about it. When
should the vote be. We've had various issues at the Board of Trade before where
we've voted things down, gone back to the drawing board, changed them, voted
them up again. I'm a big believer in sunshine. I'm a big believer in a full
discussion of the implications of all the parts, all the pieces. A debate. Let
the members decide. Irrespective of that, I as a director and all other
directors should say that no stock ought to be issued without consultation with
the present members. And it should also say that we want to ensure that people
who want to run against a chosen self selecting slate can do so. I think that
the board of directors that's going to get elected at our election, can say
that and do that. And after that I think that given the law, given the timing
on the minority rights election, given the issues that are involved in trying
to change the S4, yet again

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will determine whether we vote it up or down. But I believe the membership is
going to tell us the right thing to do.

John: Thank you Jake. Al Zatopa.

Alan Zatopa: Yes I have read the S4. And I guess the answer is no I do not
think it's the direction that the Board of Trade should go. The reason I say
that is I don't think that the concept for profit has been made. In this S4
what they're saying is this is the primary mission of the exchange is not going
to be to support the members and support the members' opportunity. It's going
to support the profits of the enterprise. And I think all of us when we look
around here, when we really think about what we're doing, are going to realize
that this could be a major problem in the way that we run this organization.

Because if you stop and think of it, we're the engine that makes this go. If
you have an administration that is trying to maximize profits, you could have a
situation where they are looking to you to increase your fees, to add other
costs or whatever so that in effect they could be getting stock and bonuses. I
think it would be very much a house divided. In the past we've had problems
with the members looking at the sixth floor and feeling that our goals were not
coordinated.

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I think if we go for profit, certainly the one that's in this S4. I think it
would be very detrimental to the exchange. And to be perfectly honest with you,
I can't see any upside. This thing started two or three years ago when the
stock market was going crazy, we were going to go public. The purpose of this
was to go public, now they're saying that there's no chance that we could do
that. There is no plans to go public. So if we don't get the benefits of the
for profit, why are we giving up all of the detrimental side of this where
we're going to be losing control and losing equity.

So in my view, I think that we should seriously re-look at what our goals are
and find out, for example one of the things that's come up is in order to get
membership value we've talked about spinning off the building in REIT. That
transaction alone may be able to solve a lot of the problems.

And just one last thing. Everybody says that you have to go for profit or
demutualize in order to be a well run organization. The CBOE is a Delaware
non-profit mutual company. They have always had cutting edge technology. Their
administration has always been the best. They've always done a great job. And
they're a mutual company. And they're non for profit. So if they can do it, why
can't we.

John: Thank you Al. Gary Sagui.

                                                                             25


Gary Sagui: I've read the S4 and I answered the question in my opening remarks.
But just to repeat, I'll repeat it again succinctly and clearly. I'm in favor
of the demutualization as long as change is made so that there will be no
issuance of stock to anyone other than present members unless these present
members vote for that issuance of stock.

The second issue is that I'd have to be convinced that a dissident slate of
directors can run a vigorous campaign for a modest amount of money. Are we
going to give up control, some amount of control through a demutualization? Yes
we will. Do we have checks and balances? Yes we will. If we're afraid, the main
check and balance is that if we are afraid of, if the board of directors runs
off in a direction that we think is contrary to member opportunity, we run a
dissident slate, we throw them all off the board and we redirect the
organization.

John: Thank you Gary. Howard Feiler.

Howard Feiler: Thank you, yes, I have read it. And no it is not the right
direction. And that's for two reasons.

The first reason is people have to realize the S4 is not a business plan.
Running the business as a business is not a plan. The S4 is a change in

                                                                             26


governance and control. No one should be asked to give up the control without
knowing what the plan is. It doesn't make any sense to me.

Secondly, on January 17th, I believe, of this year the board did a bundling
provision to keep the stock together so that it would not be sold to outside
parties without the membership portion of it. And in that bundling provision,
they let the board decide when to take it off. This is totally unacceptable, as
most of the other candidates have indicated.

The reason this is unacceptable is because if the stock gets unbundled and sold
to outside parties, then the management of the Board of Trade will have a
fiduciary responsibility to the exchange profit center. And no matter how much
yelling and screaming and proxy we put in, they'll never get rid of that
fiduciary responsibility.

Now there's two ways to fix this problem. The first way, as already mentioned,
is to keep the stock bundled and make a provision that it can only be unbundled
with a stockholder vote. The second way goes back to the restructuring as it
was a few years ago where the decision was to split the two companies. An
electronic. An EBOT and a CBOT and give them separate management, separate
resources, so that they could compete. This is a remedy for the problem we
stand now. But as the S4 is written, it's a disaster waiting to happen. Thank
you.

                                                                             27


John: Andy.

Andrew Wallace: Yes I am in favor of the S4, and as a member of the board I've
been working toward improving that S4 over the last two years. I believe it is
important that we improve our corporate governance and allow this exchange to
have the flexibility to take advantage of potential opportunities in the future.

One item that was asked of me by the nominating committee was, how do I feel
about shares being issued to outside investors. And as many people up here have
talked about, there could be an issue with that. And that is why, as a member
of the board, we elected to staple the share part, the outside share part and
the trading right part, together and leave it up to the board of directors to
make the determination as to when that should come off. And at that point I do
have a difference in opinion from my opponent in that I do believe that it does
make sense to leave that responsibility with the board of directors.

Now as I told this to the nominating committee as I'm telling you here today, I
also think it's important and always have, to listen to the membership. If the
membership says that they do not support me on that position, then that is
something that I'm willing to move forward on.

                                                                             28


The second issue is because I think it's important that we have the right
people on the board of directors to make decisions on behalf of the membership,
is I agree with the point that we need to make sure that the right to petition
to become a board member is both easily accessible and does not cause financial
hardship. Under the S4 board members will be eligible and will come up for a
vote once per year. That holds them to the responsibility that they've promised
to the membership and I think that's what's going to keep the S4 moving forward
and put us in a better position in the future.

John: Thank you gentlemen. Jake you'll take this second question first. In
August of 2000 side by side trading of financial instruments was initiated at
the CBOT. Where do we go from here?

Jake Morowitz: We initiated side by side trading not in the grain room, in the
financial room I think that it's been a rousing success. I think there's a
symbionic relationship between the floor and the ace trading. I think that once
we get bandwidth issues resolved in terms of having more non-tethered
instruments in the financial floor, there's going to be an additional growth of
trading that gets generated from the floor upstairs, from upstairs downstairs.
I think that you're giving FCMs and other institutions that control order flow
or direct their own order flow, to make a decision about which platform is most
efficient for them. I think that the experiment has shown us that in times of
dislocations there's nothing better than several hundred people facing each

                                                                             29


other and competing. I think that in very low volatility times people might
choose the option of saving the brokerage or doing it the easy way or whatever.
But I think we need to facilitate more electronically assisted open outcry, and
we need to facilitate more of a symbionic relationship between the electronics
and open outcry and let customers and members choose which they want to use
when. From the pit, upstairs, from upstairs down to the pit.

John: Thank you Jake. Alan Zatopa

Alan Zatopa: One of the thoughts I had, and I frankly can't take authorship of
it, when it comes to the grains is taking the mid-am contracts which are the
mini contracts, converting those to electronic trading and putting those down
on the floor. This is something that I think we're going to have a problem
implementing because we have a situation with Eurex and how are we going to
move forward on this. This is one of the things that should be our primary
goal, is to figure out what type of technology that we're going to use. And
then be able to move that forward.

But I'd like to give you another concept. People confuse electronic trading.
See there's actually two parts of electronic. You have electronic order entry,
which is the ability to get an order electronically into our building. And then
you have electronic trading which is the order matching.

                                                                             30


One of the things that I think we fall down on is that we're not spending
enough money to get orders into the exchange electronically. Now whether
they're matched up on ace or if they're done in the pit is something that we
will work out. But unless you get the orders in here electronically, it's going
to be hindering our growth. And I think this is one of the things that we
should very seriously look at because I think frankly, now we have a good
opportunity.

John: Thanks Alan. Gary Sagui.

Gary Sagui: I think it's clear from having had a TT terminal on my desk
everyday since August 2000 that the electronic platform has a very deep and
liquid market in the front month of our financial contracts. I think that it's
possible that if all we traded was the front month, I think that our exchange
could probably go electronic. But if you consider the other things that are
done on our floors, it is impossible for the electronic platform to provide the
liquidity and price discovery and all the different option strikes and contract
months that our open outcry system does.

As the trade gets more complex, as there are more strikes, more option months,
more complicated trading strategies, ratio trades, butterfly trades, etc., etc.
the electronic platform really starts to fall short of what open outcry can do.
I think it would be very illuminating if every member and everyone that
suggests that the pits could be closed and we could satisfy the market with an

                                                                             31


electronic platform only. I think it would be very illuminating if everyone
looked at the Eurex system, look at the front month contracts that trade on
Eurex and look at the options. They have a liquid contract in the outright
bubble. Bubble, bund and schatzee. There is absolutely nothing on the screen in
their options market.

So, I think that if we are to maintain price discovery and liquidity in
anything other than our front month contracts, we're going to have to keep open
outcry alive. It is impossible for the matching engine that we currently have,
even if there was a development in front end trading systems. The Eurex, the
ace platform, cannot handle the number of canceled replaces that it would take
to keep markets alive in a number of contract months and a number of option
strikes.

So, hey I'm wandering here but to wrap it up, it is crucial not only for member
opportunity that we keep open outcry alive, but it's crucial to maintain the
price discovery, liquidity and integrity of back month contracts that we keep
open outcry alive and that we give it whatever support it needs in terms of
electrifying it, reducing fees or whatever it takes.

John: Thanks Gary. For the benefit of the members listening in or monitoring
Membernet, I'll repeat the question. In August of 2000 side by side trading of

                                                                             32


financial instruments was initiated at the Board of Trade. Where do we go from
here? Howard.

Howard Feiler: I think everyone's in agreement that the strength of this
exchange lies in the liquidity providers. The problem with the technology is
what's happening to those liquidity providers in the pit. And what I see
happening on the floor is revenue streams are going from the floor up to the
exchange level. This is decreasing profitability and it's going to have a
negative impact on our market makers. Let me give you an example of how this
occurs.

If a Goldman Sachs or a Merrill Lynch flashes in an order to sell a hundred lot
into the pit, it generates revenue for the broker and the local trader has a
chance to trade off of it getting the edge. The exchange will get a fee of $5
in this transaction. Now, if that hundred lot is put in the electronic
platform, there's no revenue to the broker, there's no revenue to the trader,
and the exchange gets anywhere between $35 and $25. That's a 500 to 700%
increase in revenues.

If our strength is our liquidity providers, then we cannot reduce their
profitability in low volatility instances because in high volume, high risk
instances their ability to make markets will be diminished. I think some things
need to be done about this. I think pricing is off. I could go into my whole

                                                                             33


pricing theory, but if anybody has questions on that, please ask me. Thank you.

John: Andy Wallace.

Andrew Wallace: I believe in letting the marketplace decide where they want to
put their orders, electronically or open outcry. However, I make my living on
the floor of open outcry and I have for the last 22 years.

Open outcry provides liquidity, but also provides information about the trades
that are critical to our outside customers. And that's what I do, is I speak to
customers around the world who are looking to get their orders filled.

As a member of the finance and executive committee, we've committed $24 million
in the budget this year to help improve and electrify the open outcry floor, to
help us compete against the electronic marketplace.

As I spoke about earlier, we've helped to put pricing on a more equal basis so
that we can have a competitive debate and exchange between electronic and open
outcry. Electronic markets, however, do provide a break in fees, and that's
certainly of interest to many of our outside customers. However, what we give
them is more than that by giving them the information and liquidity, the depth
that our market makers provide here. We do need, however, to make

                                                                             34


some improvements in our electronic platform. The ace Eurex alliance has not
worked out as we expected from three years ago. We need to make some changes
and some of those changes are being made.

And when I talk about change I'm talking about a system that will allow better
access, to put more products on the system so we can list more products and be
more competitive. And more axis to bring more customer orders in so that they
can have a choice between trading electronically or on the floor.

And finally I'll talk about the firm that I'm associated with, R.J. O'Brien.
R.J. O'Brien has really been at the forefront of helping the marketplace during
this change that we've seen in the last two years. They now bring about 80% of
their orders electronically to the pits so that the orders are filled into the
pits as opposed to calling through the system. They take advantage of some of
the benefits this exchange has given them. To bring their orders electronically
to our exchange, give that order into the pit to let the broker and the local
have a chance to trade against it, and get it back out. That's a cost savings
that helps the exchange and I think it's a win-win for all involved.

John: Thanks Andy and there won't be any charge for that little advertising.
Jack.

                                                                             35


Jack Callahan: We have instituted side by side. However, I believe the open
outcry system is still competing with one arm tied behind its back. The first
thing we have to do is get an adequate order delivery system to the open outcry
system, so that they can compete on turn around time. Order in, execute in the
open outcry system. Order electronically fill, given back electronically to the
customer. And get this down to somewhere around minutes or a quarter of an hour
or whatever. Where we go from here, that's my first step.

Secondly, electronic trading and open outcry can evolve into the future. We may
have a hybrid system whereby the markets and the prices come out of the open
outcry system and in the pits. But they're electronically accessed by the
outside world.

A simple example is what's going on at the CBOE. A customer can sit with his
laptop in Aspen. Put in a market order to Charles Schwab's website. It goes
from there to the CBOE order routing system. Is executed at the best price in
the IBM pit, which is produced by the market makers there. The report goes back
to his laptop. This can be done in minutes if it's a market order.

Electronics have proven their worth, so has the open outcry system. And I think
that the open outcry system has to have electronic assistance and electrified
pits.

                                                                             36


John: Thank you Jack. I apologize. As I was saying before, the remaining
prepared questions from the nominating committee to one extent or another have
pretty much been covered by the opening statements and the answers to the
earlier questions of the candidates here. So we'll open this up to Q and A from
the audience. We've had several questions faxed to us and one that I was going
to present myself, but I see he's in the audience already. Tim Feldheim would
you care to present the question that you had.

Tim Feldheim: I'd like to ask all the directors what their stance on the
minority lawsuit is and also if they think that the proposed allocation is
fair.

John: We start actually with Alan Zatopa since this involves all the
candidates.

Alan Zatopa: Well frankly I'm not an attorney. I think the allocation should be
as close to the way the shares initially were allocated I guess. There's a lot
going on with that suit right now. I'd like to see it resolved on the one hand.
On the other hand I don't think that just because the exchange. I don't think
the exchange just because we want to go through this demutualization should be
forced to do something that's not equitable for all the members. So this is why
I think that if the exchange would calmly look at what's going on and see if we
can make a settlement that makes sense, we should settle it. If we don't and if
it doesn't make sense, then we should fight it and hold off on the
demutualization.

                                                                             37


John: Gary Sagui

Gary Sagui: I own a full and I own an AM. And I think on the stock allocation
the class A stock allocation does not make the list of the top five things that
I think is going to effect the value of my full or my AM. I think that
electrifying open outcry, coming up with a good next generation of electronic
platform. Hey, I think cross margining with the Merc would be more important
than that. I think that coming up with a better margining system than span is
going to be more important to the value of my seat than whether the AM gets
20%, 10% or 30%.

I think that, I said in my statement that I don't think that we're going to
have a hot IPO here that's going to make us a lot of money. That's not what I'm
looking to do as an owner of exchange seats and a participant at the Board of
Trade. I think that the issue has gotten much more emotional than the economic
arguments indicate. I'd like to see it resolved. What do I think is fair. I
think 16% would be fair. I think 32% would be fair. My blood doesn't boil on
the issue. They decided it would be 20%, I'm happy to stay with that. I
wouldn't be upset if it were changed from that either lower or higher. I'd like
to get it over and behind us and I think the debate on it has been kind of a
waste of time of our organization.

                                                                             38


John: Thanks Gary. Howard

Howard Feiler: I own an AM. Is it fair, I don't know if it's fair. I do know
one thing. When I joined this institution they made me sign the book. And the
book says if you've got a dispute you take it to arbitration. I want to say
first of all I agree with Gary, the issues before this exchange are not this
suit. But I know for a lot of members who've spent a lot of time on it, it
isn't the big issue. But I believe this issue belongs in arbitration. We all
agree to go to arbitration when we have a dispute.

Now. That being said, I did some research on this issue and it seems that it
can be settled. And my advice to the minority member suit is to strive for
arbitration on the allocation. Arbitration on the allocation. Let the
arbitrators decide as every member has agreed.

John: Thanks Howard. Andy Wallace.

Andrew Wallace: First as a member of the board I did vote against the decision
on the allocation, as did two other members of the board at the time. I didn't
feel that the allocation committee gave the equal weights that were needed to
come to that conclusion. However, I do support that the committee followed the
business judgment rule in making that decision and therefore that is why I

                                                                             39


have voted in favor of the restructuring going forward with the current
allocation.

Since this lawsuit has come about, I have spent many times talking with you,
Tim, and other members of the suit, trying to keep up to date and trying to
move this forward and trying to continue the discussion between both minority
suit members and our chairman.

We have suggested and made suggestions about arbitration, however we've been
unable to come to conclusion as to what the best way to come about that is. I
don't know the best way to resolve this. Right now it's being handled by our
lawyers, their lawyers, our chairman and the members of the suit. I hope we can
come to a conclusion on this because I do feel that it is critical, not only
because what the decision makes will effect what your final shares will be in
the new venture, but I think that holding up, there is the potential that this
may hold up when restructuring may actually happen in event of a positive vote.
So I would urge both parties to continue to push for some type of resolution on
this issue.

John: Thanks Andy. Jack Callahan.

Jack Callahan: I think that the current allocation is reasonable. How fair it
is, others are going to deliberate. But the situation has to be resolved before
we go

                                                                             40


further or get to the end of the restructuring program into a vote. So I'm sure
we all would like to see it resolved as soon as possible and as fairly as
possible.

John: Thanks John. Jake.

Jake Morowitz: I think that this whole issue was handled terribly from the
beginning, and we are unfortunately living with the results of some very, very
bad decisions. I don't think that anyone doesn't want it resolved. I'm an old
believer in you get what you agree to get when you got into the game. And if
you have an argument that ought to be made to change that, then you ought to
make that argument in the forum that it should be made, and at Chicago Board of
Trade that's an arbitration committee forum, not a court of law.

I would like to see it arbitrated. I would like to see it resolved. I agree
with Gary that there are dozens of more important things to do than to spend
millions of dollars and a lot of paper and a lot of energy trying to fight this
out in a court of law. If we can't get it arbitrated in a timely fashion, one
thing that we can do is demand a vote in the S4 and vote it down. And then
we're back to square one and then we can bring up a new S4 that doesn't include
any different allocation than the allocation that was promised out of the box.

                                                                             41


John: Thanks Jake. At this point for those of you on Membernet, we'll take
questions from the audience and the people present here, any questions for the
candidates.

Q. Hello, my name's Mark Gordon. I'm a COM member and a full member. This
question I submitted to the nominating committee. I believe it is in the light
of many people it would be viewed as an insignificant thing in the major issues
that we're trying to address today and the reasons why we'll be voting. The
answer I'm looking for from this question is a simple yes or no from the
directors. And that answer I hope will give me a clear insight into how the
directors will make other decisions in the future regarding the exchange.

Let's address the issue of individuals avoiding the payment of non-member
trading fees under the status of a professional trading group or proprietary
trading account. Do you, as director candidates, believe COM members trading
under group status should be excluded from paying the 60 cent future
transaction fee that individual COM members must pay? Would you as a director
support measures to curb the fee breaks COM members receive trading under a
group status?

Once again, I realize this might appear a minor issue in the scope of things,
but I think this will clearly outline your direction for the exchange.

                                                                             42


Gary Sagui: I'm not sure I understand your question.

John: Do you want to ask a question of the questioner then. I guess, what's
your point here.

Q. [Gordon] My point is that COM members that trade under a group status are
able to avoid paying the 60 cent non-member fee that an individual COM member
must pay on every future transaction they make.

[ns] Are you talking ace?

[Gordon] I'm talking here in the agricultural room, when I trade under my COM
membership every future transaction that I put into the futures pit I pay a 60
cent fee on. When I'm under my full membership fee, I only pay I believe it's a
five cent fee.

[ns] Just to clarify here. Are you saying that there are, if there's someone
else, so you're a CTI-1 and you're saying if there's someone else that's a
CTI-2 who's trading a proprietary account of a member firm with a COM in this
room, that when he is trading for the member firm's proprietary account, he
winds up paying the member rate in the futures rather than, and you wind up as
an individual paying the non-member rate.

                                                                             43


[Gordon] Correct.

[ns] Okay. I think I understand it. I've got to think about it.

[Gordon] I'm speaking from the agricultural. I trade in the agricultural room.

[ns] Give me 30 seconds.

[ns] Let somebody else answer.

John: Howard, please.

Howard Feiler: Now that we understand where you're coming from, could you ask
your final question. What was the end of the question?

[Gordon] Would you as a director support measures to curb the fee breaks COM
members receive trading under a group status.

[ns] Not only do I think those fee breaks should be curbed, I also think that
the rates are too low to start with.

John: Andy Wallace. Now you might understand why even though we had this fax,
it was a little difficult to separate out the issues and we didn't go for this.

                                                                             44


Andrew Wallace: I believe that if you want the lower fees, you should own a
membership, you should not have a fee break based on spreading out that
membership over more than one trader.

John: Go ahead Gary.

Gary Sagui: I believe that you buy a seat and you wear a seat in order to get a
fee break. Myself and my fellow members, I have three partners that I trade a
joint account with. We bought four seats over at the Merc even though we're not
there very often. We did that to trade at a member rate. We buy four seats, we
give up $14,000 a month in income at the Merc. We wear those seats, we give up
that break mainly to get a fee break. Occasionally we go in the pit. So, no
fee. If you want the fee break, it's easy. You buy the seat.

John: Thanks Gary. Jack Callahan

Jack Callahan: Members should have lower rates than non-members. If that's not
the case, it should be reviewed.

John: Thanks Jack. Jake.

                                                                             45


Jake Morowitz: Mark, I want to just ask you a question back. Are you aware that
those people that you're describing pay a higher number than you do for your
options trades.

[Mark Gordon] Yes, I believe they pay a delegate rate, correct?

Jake Morowitz: They pay a brokerage rate to the exchange. They're acting as a
broker. So they pay a brokerage rate. So it really comes down to how many
options they do, how many futures they do. It is disingenuous to say, gee
you're paying 60 cents for futures trade, and not to mention, I mean I don't
know what ratio you do, but it depends on what ratios they do. It might be an
inconsequential number if you do a lot more options than futures. But that
being said, there's two sides to this coin and it's not nearly as unlevel as
you think it is. That being said, I have no problem with everybody who's in an
option pit on a lease badge paying the same rates on a lease badge. Anybody
who's in the options pit on a COM badge that they own, paying the same rates on
a COM badge that they own. And anybody that's an option pit on a yellow badge
paying the same rates as everybody on a yellow badge pays. But it's not nearly
as clear as the way you explained it. There's a disadvantage that those people
have right now as well.

[Mark Gordon] So Jake would you support...

                                                                             46


Jake Morowitz: I think I've answered it. I'm happy to have everyone pay the
same given.

John: That seemed fairly clear. One thing I want to point out, that questions
on Membernet and questions from the audience, that we at the very least observe
the Marquis of Queensberry rules here. I don't want any pointed questions. I
want questions that all the candidates can answer. So. Al your turn.

Alan Zatopa: My answer would be yes I would look into it because the concept
that a member deserves a lower fee is self-evident. So in your case, it would
seem to me that yes, we would look into it. What the actual facts of the matter
are, we wouldn't know until we did look into it.

John: Other questions.

Q. [female] My question is to the candidates, how will the current S4 affect
the CBOE exercise right. Will the CBOE ever be able to terminate the exercise
right under the current S4?

John: No, you gave up your turn last time Gary. Howard actually, and since
everybody has spoken to the fact that they've read the S4.

                                                                             47


[ns] That's an excellent question. And my answer is, I absolutely do not know.
Nobody seems to know. That's what's wrong with the S4.

John: Andy.

Andrew Wallace: Well I would disagree by saying that I think that there was a
great stride forward in the last year and that we have an agreement now in
writing with the CBOE, something we've never had in the past that directly
answers that. Now is this agreement which is part of the S4 good forever going
forward. Well that's up to the courts to decide so of course you can't say
that's it's good forever. However it is a step forward and codifies what we
don't currently know.

John: Thank you. Jack.

Jack Callahan: The recent agreement last year regarding the CBOE exercise
right. If we do everything according to the S4 and giving the members on the
floor, the floor community, the tools to compete and everything else to keep
the pits viable, we won't have a problem with the exercise privilege. However
if the agreement allows for cases to go to arbitration if the CBOE feels that
we are not fulfilling our obligation to keep our pits viable. Obviously it's in
everybody's interest to make these pits viable, starting with us.

                                                                             48


John: Thanks Jack. Jake.

Jake Morowitz: I think that the bigger in volume any agreement is, the more
likelihood that anybody who wants to litigate it can litigate it. I think your
question is more appropriate to attorneys, we're not attorneys. The Board of
Trade, if I'm a director and anybody who is a director, cannot ever do anything
to allow our exercise right to be extinguished unless we knowingly, willingly
allow that to occur. Does the agreement in place now do that? I believe it does
but there's a whole bunch of conditionals about how people perceive it to be.
That's always going to be the case. That's the problem with any legal
agreement.

John: Thanks Jake. Al.

Alan Zatopa: This is one of the things I have against the demutualization,
because as I understand it, if we stay the way we are, that exercise right is
not at risk, as I understand it. If we demutualize we put it at risk. Now how
great that risk is is hard to tell. I think that initially it would not be at
risk following the S4. The problem is when we start talking about dilution,
there's a lot of things that could happen on down the line that could put it at
risk. And frankly this is one of the reasons that I think demutualization may
not be the way that we should go because we may be giving up things and
actually losing member value rather than gaining member value.

                                                                             49


John: Thanks Alan. Gary.

Gary Sagui: I'll quote Jake Morowitz, any legal document can be litigated. You
can litigate anything. Are you going to win? I don't know. I'm actually happy
that we had this dispute with the CBOE over the exercise right. Because it
forced us to have a core right in our demutualization that guarantees that
we're going to have a member preference in perpetuity. And if that member
preference, I fought for that with Nick and Gary Knight and other members of
this exchange. I felt that really the fundamental value of our seat, if we go
entirely electronic, is to have a member fee preference. We had quite a fight
to convince the board of directors and former board of directors in 2000. We
had quite a fight to convince the board of directors to put a member preference
into demutualization agreement. Now, I don't have to fight anybody. If our
member preference is denigrated in any way, all I have to do is go over to the
CBOE and say, hey boys, you know there's some fine print in the member
preference now that is diminishing its effectiveness. Right away the board of
directors of the CBOE will throw the flag and will threaten the Board of Trade
with loss of the exercise right. The process will go to arbitration and bottom
line is that this member preference that we have is a stronger member
preference than any other exchange could possibly have in an all electronic
world.

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So I guess what I'm saying is, I feel confident that the exercise right is safe
and that furthermore the agreement that we have with the CBOE while it could be
litigated is in fact something that is going to guarantee the value of the
trading right that we have on this floor here forever.

John: Thanks Gary. Other questions from the floor.

Q. Several of the candidates for director expressed concern with the S4. You
guys saw some issues with it, loss of control or dilution. This question is for
those of you that had problems with the current S4. The Mercantile Exchange did
restructure. Are you familiar with their restructuring and were they able to do
things that avoided your concerns.

John: Andy Wallace, you're up.

Andrew Wallace: As I think I stated earlier concerning the S4, I do support
much of the way it stands right now. And the one caveat I will make to that,
because we have had more member input over the last month is, I would want to
make sure that the petition process to allow members to run for the board is
straightforward and fair and allows them a chance to compete against a slated
nominated board of directors. So I want to make sure that they have an
opportunity to do that.

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However, I do believe that the S4 as it stands is important. And I do believe
that this concern about shares that may be issued in the future, is an
important concern of the membership and I think that the board of directors, as
they always do, have to listen to the members and determining what to do with
that. And again, that's why we stapled the trading right shares together with
the common stock shares so that we can't do that until the board of directors
feels that it's necessary.

Now, as board members we have to listen to our members and make decisions based
on what we think they want us to do and what we think is good going forward. We
have to be careful about going too far back and changing what the spirit of
this S4 is because I think if we do that, you're not going to be able to keep
or bring in the type of management that this institution wants. I think you may
take a step back to where you're protecting just what the members' interests
are by bringing in the type of CEO president that we've seen in the past. I
think we want to move forward as the CME has done with the professional
management team that has a watch guard of its board of directors and I think
that we should follow along that same path.

John: Jack.

Jack Callahan: As I mentioned earlier, I think the S4 is a blueprint for the
direction of the Board of Trade. There are many, many checks and balances in

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here. I think it's going to be very hard actually to complete it in its current
form right now. Things will change over a period of time. As I said, there are
speed bumps and we're reassessing as we go along here.

I believe there are enough checks and balances in there so that the burden will
be on the board of directors to act in the interest of the stockholders. So far
as issuing additional stock, it better bring back a major value to the owners
relative to what dilution and control they may have.

These are decisions for directors. I think there's enough checks and balances
in the S4 going forward.

John: Do you want to repeat your question.

Q. It was not so much a question to ask in general. I know there are people
with issues with it, but the Merc has restructured. Is anyone familiar with how
they did it, and does it satisfy those or would you be in favor of doing it the
way the Merc did it?

John: Jake.

Jake Morowitz: I don't own a Merc seat, and although I'm familiar with the
general outlines of how they did it, I can't tell you that I've read their S4
and I

                                                                             53


think that it's unfair for me to do a real comparison of the details. I also
think that it's unfair and not right, we've all expressed our views about the
S4. I think that the board of directors are going to have to make some
decisions about what they're going to do in terms of changing it or bringing it
to the membership. Ultimately all the members need to get the S4 in their
hands. And ultimately the membership has to debate it. I think that we're
trying to elect directors here and I think that has more to do with a whole
slew of issues, their experience, their character, their views in general on
things. And getting down to the Merc is a little too much detail for a guy
who's not a member over there.

John: Thanks Jake. Al.

Alan Zapota: I'm a former member of the Merc but no I have not read it. I think
you bring up a pretty good point though, that you can look at the way other
exchanges do it, and you can learn something. I do know for example right now
they're having a big political problem over there. The members are very upset
about the compensation of the top management. It's going to be a political
brouhaha over there. So is watching them going to be interesting? Yes. And I
think the idea is it probably would be a good idea to read through whatever
their document was to garner out and maybe we can learn something from them.

John: Thanks Al.

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[Gary Sagui] I'd love to answer the question. I am a member of the Merc. I'm
familiar with their demutualization. I'm very familiar with their prospectus.
The Merc was first. Ours is going to be better.

Point one. Member preference fees. Our member preference is so much better than
the Merc's it's ridiculous. I could go into detail if you want.

Second thing. We have a one year board, if we're not satisfied with what our
board is doing. If we think that our board is trying to pump up dividends for
the class A shareholders at the expense of the class B shareholders, we can
bounce those guys out in one year by running a slate of five people and taking
control of the board. Much better than the Merc.

The third thing is, they issued a substantial amount of what's called Treasury
Stock. That's what the discussion was here about today, an extra 70 million
shares. They had a similar amount of extra stock that is just sitting there for
use by the board of directors. It's obvious to me from listening to this sample
of potential directors, that there is not going to be any issuance of stock
that our board can issue without our approval. Three counts. Assuming, assuming
that we eliminate that 70 million shares and assuming that stock cannot be
issued at the Board of Trade without, additional stock cannot be issued without
a vote of the members. Our S4 will be better, finally, in three significant
areas.

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John: Thanks. Charlie Carey had a comment on that.

Charles Carey: Tom, you make a good point there. The Merc has completed a
demutualization, the NYMEX has completed a demutualization. Two different types
of governance. I spoke to Scott Gordon, seven of the board members at the CME
are protected by Delaware law, they're nominated by an inside nominating
committee. I think Gary's right except that we probably do have to look at our
nomination process to ensure that you can indeed run an opposition slate if
you're not pleased with what goes on, and I think everybody said that, but that
is part of fine tuning this document. And I think somewhere between what the
CME has done and the NYMEX has done, you'll get to the proper governance to fit
our business model.

John: Thanks Charlie. Jay Holman.

Q. I'd like to ask the fellows a clearing question. Within the context of our
present reality, which is that we are two completely separate entities and we
really have no contractual performance agreement with the clearing corporation.
Do you feel that that relationship, the way it exists today, is adequate to
serve our needs as we move forward.

John: I think we're back to Jack.

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Jack Callahan: Are you referring to BOTC? As I understand BOTC is owned by
members, the members of BOTC. Not necessarily by our exchange itself. The
clearing business is a business in itself. Ideally you like to vertically
integrate all the processes. It's certainly a profit center to somebody. I
think it's a business question. We're were basically a customer of BOTC. Do we
want to take that over ourselves. Do we want to spend the resources to become a
clearing corporation. Can we count the same efficiencies. I think we have cash
in the bank right now, and I don't know that we'd consider such maybe a year or
so ago. I think it's a business decision on a different business. We'd have to
look at it that way.

John: Thanks Jack. Jake.

Jake Morowitz: The answer is no. I'm terribly unhappy with the ongoing
relationship that the Board of Trade has with BOTC. We generate 90 something
percent of their revenue, yet we have no contractual relationship. We have no
reason to believe that they are not going to clear our competitors. They do.
They are constantly looking for other business revenue and models which might
negatively impact us. It's a terrible relationship. It should have been
addressed years ago. It should have been on the front burner of the new
administration. Everyone says it should be addressed. It's terrible.

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John: Thanks Jake. Tell us what you really think though. Al Zatopa.

Alan Zatopa: That's a good question. The Board of Trade I've always felt is a
very well run organization. It's very well run now. They've got a good
president and a good chairman. And I think we still represent like 90 some
percent of the business. [John: 91%.] Ninety-one, thank you. So I'm not too
concerned now. But I think the issue is, as we go forward and they either get
more business or get more business from our competitors or our competitors and
I understand that this may even be happening as we speak, start getting more
influence over the management of BOTC. There may come a point when from a
business point of view, we're going to have to look at it because they control
some of our money. How much we pay for clearing. So, I don't think it's an
issue right now, but I can certainly see how it could be an issue as things
move forward.

John: Thanks Al. Gary.

Gary Sagui: The relationship with BOTC is completely unacceptable and it has to
be dealt with now. Let's take the issue of them getting cross margining to our
competitors. I had this conversation with Tom Hammond. This was before broker
tech came up. I said, Tom, if you chose to, could you cross margin broker tech
products against the Board of Trade products without our, could you give
complete margin relief to broker tech positions that have offsetting positions
at the Board of Trade. And the answer was straightforward, yes, we
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have that right. We don't intend to do it, but we have that right. That is
absolutely unacceptable.

The other thing is, let's revisit common clearing. Way back when, when we were
talking about common clearing, hey, we almost got there. We shot it down. One
of the reasons for doing common clearing was that we were going to be able to
do cross margining within common clearing. What did BOTC tell us back then.
Well BOTC said, hey, we can cross margin Merc products against the Board
products. We don't need common clearing to have cross margining. Well that's a
crock.

BOTC sat down for, I don't know how many sessions, with Philip Andrew Gill over
at the Merc and they hammered out what they called a cross margining agreement.
Well, one, the cross margining agreement was only available for the proprietary
accounts of firms that cleared the Merc and the Board of Trade. It wasn't
available for CTI-1 accounts. It wasn't available for CTI-4 accounts. You want
to talk about member opportunity, talk about having cross margining.

So, one, they never provided the product to anyone but CTI-2 accounts that
cleared both exchanges. And secondly, the process was so awkward that for firms
to be able to use cross margining, at the end of the day at 2:00, they had to
look at all the positions that all their traders had, and they had to look at
whether they'd get the better margin break by margining Board of Trade to

                                                                             59


Board of Trade, fives to tens. And blues to golds over there. Or whether they
could get a better break by margining Board of Trade products against Merc
products. And the firm by some set time in the afternoon, then had to pull the
positions out. They had to determine where they got the better margining. And
then they had to take the positions out, isolate them, and send them into a
cross margining agreement. Logistically it was so overwhelming that nobody
could, not even major firms had the ability to accomplish that in such a short
timeframe and so [John: Gary. Gary.] it was completely ineffective. Hey,
they're not doing their job. They're not doing their job and they're a
competitive threat and we should call them on the carpet.

John: Thank you. Howard.

Howard Feiler: Jay, can you repeat the question.

Q. The question, Howard, was, given the context of our present reality with
clearing where we are two completely separate entities and we have no
contractual agreement with BOTC. Do you think that relationship is adequate to
serve this exchange as we move forward?

Howard Feiler: Okay. Well the fact that we're separate has its advantages and
disadvantages. I don't think we'd be able to get a triple A credit rating
without being separate. And that triple A credit rating is something that our
customers

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value very highly. I don't think that competitive advantage of this exchange
has been marketed enough. But it's something that our customers definitely
want.

Now, should we have a contract? Absolutely. Not only should we have a contract,
but. I called the director of the Board of Trade Clearing Corp. this week to
find out why we didn't have a contract. And the first question I asked him was,
how much of your revenues is the Board of Trade.? He said between 85 and 90%
and then there's some auxiliary revenues from holding the margin amounts. How
can an organization that's 85 to 91% of the customer base not negotiate a
contract from a position of strength. This is mind boggling to me.

Of course we should have a contract. The question I think you should be asking
Jay is, why don't we have a contract already.

John: Thanks Howard. Andy.

Andrew Wallace: I think that our current relationship with BOTC is a problem.
And it does need to be addressed and it is on the agenda this year of the board
to address that and I hope whoever is on the board takes that very, very
seriously.

I recently found out that BOTC has raised some of the fees to our members just
starting this year. I just found this out last week and have a call into Dennis
to

                                                                             61


talk to him about it. They're using some of these fees to help improve their
infrastructure. Why are we paying higher and higher fees to improve their
infrastructure so they can continue to bring in competition against our
markets.

I believe that the business we do is extremely attractive to many clearing
organizations around the world. Clearing is a commodity business. I think that
it's important that we go out, talk to other clearing competition, because I
think that the current fees we pay to BOTC can completely go away. I think that
our business is attractive enough that we can find a way to knock our fees down
substantially and I think that that's something that needs to be done this
year. I think that it's again one of the stated missions for this year's board.
And I think we take that very seriously.

John: Thanks Andy. We'll have one last question here.

Q. This is a fairly simple question but I think. My name is Art Wolf and I
believe that over the years we've gotten less than quality professional advice
from some of our accountants and attorneys. Would you as a member of the board
be prepared to evaluate our outside professional people and be prepared to make
a change if it looks like it should be done?

John: Jake.

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Jake Morowitz: In a New York second.

John: That's as close as you're going to get to a short answer.

Jake Morowitz: New York second. I think we've had terrible advice and terrible
counsel for a long time, without reevaluating it, without changing it. In a New
York second.

John: Al Zatopa.

Alan Zatopa: I agree.

John: Gary Sagui.

Gary Sagui: I think that's a basic responsibility of a director to evaluate
accounting and legal advice that we're given.

John: Howard.

Howard Feiler: Art, of course it should be reevaluated. The question I have is
why hasn't it been reevaluated already.

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John: Andy.

Andrew Wallace: Art, yes I think we do need to look at this issue and we have
several service providers who have not given us the type of advice we'd like.
There have been some discussions in the past, but I think it needs to come to a
close. And I think that our new CEO and president, Dave Vitale, needs to
address this issue with the board of directors pushing very hard.

John: Jack Callahan.

Jack Callahan: Of course. We have plenty of instances of directors behaving
badly with Enron for example. There's no question this issue should be reviewed
because it's very important to the institution. It's a no-brainer.

John: And with that gentlemen, it's 4:00. Any further questions you have, we
have a number of venues. You can ask the candidates themselves. Trade Talk. Put
some calls. I want to thank everybody for their participation today.

While CBOT Holdings, Inc. (CBOT Holdings) has filed with the SEC a Registration
Statement on Form S-4, including a preliminary proxy statement and prospectus,
relating to the restructuring of the Board of Trade of the City of Chicago, Inc.
(CBOT), it has not yet become effective, which means it is not yet final. CBOT
members are urged to read the final Registration Statement on Form S-4,
including the final proxy statement and prospectus, relating to the
restructuring of the CBOT referred to above, when it is finalized and
distributed to CBOT members, as well as other documents which CBOT Holdings or
the CBOT has filed or will file with the SEC, because they contain or will
contain important information for making an informed investment decision. CBOT
members may obtain a free copy of the final prospectus, when it becomes
available, and other documents filed by CBOT Holdings or the CBOT at the SEC's
web site at www.sec.gov. This communication shall not constitute an offer to
sell or the solicitation of an offer to buy, nor shall there be any sale of
securities in any state in which offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
state. No offering of securities shall be made except by means of a prospectus
meeting the requirements of Section 10 of the Securities Act of 1933, as
amended.

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