The Board of Trade of the City of Chicago and Subsidiaries - Page 6

                                        - 6 -                                         

               ** The Chicago Board of Option Exchange (CBOE) is an organization      
          separate from the CBOT.                                                     

               The bundles of rights inherent in CBOT memberships are                 
          divisible into two components:  the ownership or equity component           
          and the trading privilege component.  Although all members of a             
          class of membership have equal rights and privileges,                       
          approximately 35 to 40 percent of petitioner's members do not               
          exercise their trading privileges.  The owner of a membership is            
          entitled to lease or delegate the trading privileges attributable           
          to the membership.  A member who leases or delegates trading                
          privileges retains the voting and dissolution rights attributable           
          to the membership.  Included in the 35 to 40 percent of members             
          who do not exercise their trading privileges are approximately 16           
          percent of petitioner's members who neither exercise their                  
          trading privileges nor lease or delegate them to third parties.             
               Petitioner's members may freely sell or transfer their                 
          memberships pursuant to petitioner's rules and procedures                   
          described infra pp. 10-11.  During the taxable years 1988 through           
          1990, 494 full memberships, 334 associate memberships, 25 GIM               
          memberships, 487 COM memberships, and 432 IDEM memberships were             
          sold or otherwise transferred.  At the time of trial, spring                
          1994, the fair market value of a full membership was                        
          approximately $575,000.  When a membership is transferred, the              







Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011