[Federal Register Volume 81, Number 238 (Monday, December 12, 2016)]
[Notices]
[Pages 89543-89559]
[FR Doc No: 2016-29646]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79474; File No. SR-CHX-2016-20]

Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Notice of Filing of Proposed Rule Change in Connection With the
Proposed Transaction Involving CHX Holdings, Inc. and North America
Casin Holdings, Inc.

December 6, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 2, 2016, the Chicago Stock Exchange, Inc. (``CHX'' or
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange is filing this proposed rule change in connection with
a Transaction (``Transaction'') whereby Exchange Acquisition
Corporation (``Merger Sub''), a corporation organized under the laws of
the State of Delaware and wholly-owned subsidiary of North America
Casin Holdings, Inc. (``NA Casin Holdings''), a corporation organized
under the laws of the State of Delaware,\3\ would merge with and into
CHX Holdings, Inc. (``CHX Holdings''), a corporation organized under
the laws of the State of Delaware,\4\ with CHX Holdings continuing as
the surviving corporation. Pursuant to the Transaction, the Exchange
will remain a wholly-owned subsidiary of CHX Holdings and CHX Holdings
will become a wholly-owned subsidiary of NA Casin Holdings.
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    \3\ NA Casin Holdings was incorporated in the State of Delaware
on January 4, 2016.
    \4\ CHX Holdings was incorporated in the State of Delaware on
January 26, 2005.
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    The text of the proposed Third Amended and Restated Certificate of
Incorporation of CHX Holdings (``CHX Holdings Certificate'') is
attached as Exhibit 5A.\5\ The text of the proposed amended Bylaws of
CHX Holdings (``CHX Holdings Bylaws'') \6\ is attached as Exhibit
5B.\7\ The text of the proposed Amended and Restated Certificate of
Incorporation for CHX (``CHX Certificate'') is attached as Exhibit
5C.\8\

The text of the proposed amended Bylaws of the CHX (``CHX Bylaws'') is
attached as Exhibit 5D.\9\ The text of the proposed amendments to the
Rules of the CHX (``CHX Rules'') is attached as Exhibit 5E. The text of
the proposed Amended and Restated Certificate of Incorporation of NA
Casin Holdings (``NA Casin Holdings Certificate'') is attached as
Exhibit 5F. The text of the proposed Amended and Restated Bylaws of NA
Casin Holdings (``NA Casin Bylaws'') is attached as Exhibit 5G. The
text of a resolution of the Board of Directors of CHX Holdings dated
November 22, 2016 to waive certain ownership and voting limitations to
permit the Transaction (``Resolutions'') is attached as Exhibit 5H. The
text of the Stockholders' Agreement of NA Casin Holdings (``NACH
Stockholders' Agreement'') is herein attached as Exhibit 5I. The text
of the Amended and Restated Put Agreement by and among North America
Casin Group, Inc. (``NA Casin Group''), NA Casin Holdings, and Saliba
Ventures Holdings, LLC (``Saliba'') (``Saliba Put Agreement'') is
herein attached as Exhibit 5J. The text of the Amended and Restated Put
Agreement by and among NA Casin Group, NA Casin Holdings, and Raptor
HoldCo LLC (``Raptor'') (``Raptor Put Agreement'') is herein attached
as Exhibit 5K.
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    \5\ The original CHX Holdings Certificate was filed with the
Delaware Secretary of State on January 26, 2005 and was last amended
on July 26, 2006 to modify the ownership limitations applicable to
Participants and other persons or entities and increased the number
of shares of common stock that CHX Holdings is authorized to issue.
See Securities Exchange Act Release No. 54213 (June 26, 2006), 71 FR
43547 (August 1, 2006) (order approving SR-CHX-2006-22); see also
CHX Article 1, Rule 1(s) defining ``Participant.''
    \6\ Reference to a ``current'' governing document (e.g.,
``current CHX Holdings Bylaws'') is to the version of the governing
document that is currently operative, whereas reference to a
``proposed'' governing document (e.g., ``proposed CHX Holdings
Bylaws'') is to the version of the governing document that would be
in effect pursuant to this proposed rule change.
    \7\ The CHX Holdings Bylaws were last amended on November 23,
2009 to eliminate an age restriction for CHX Holdings Directors. See
Securities Exchange Act Release No. 61053 (November 23, 2009), 74 FR
62861 (December 1, 2009).
    \8\ The original Certificate of Incorporation for CHX was filed
with the Delaware Secretary of State on March 15, 1972 and was last
amended on February 9, 2005 in connection with the demutualization
of the CHX. See Securities Exchange Act Release No. 51149 (February
8, 2005), 70 FR 7531 (February 14, 2005).
    \9\ The CHX Bylaws were last amended on April 16, 2014 to modify
the process by which the CHX Vice Chairman is nominated and elected.
See Securities Exchange Act Release No. 71954 (April 16, 2014), 79
FR 22557 (April 22, 2014).
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    The text of this proposed rule change is available on the
Exchange's Web site at http://www.chx.com/regulatory-operations/rule-filings/, at the principal office of the Exchange, and at the
Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B and C below, of the most
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this proposed rule filing is to adopt and amend
rules and other relevant corporate governing documents in order to
permit the Exchange and CHX Holdings to effect the Transaction.
Current Ownership Structure
    Since February 8, 2005, CHX has been a wholly-owned subsidiary of
CHX Holdings.\10\ CHX Holdings is the record and beneficial owner of
1,000 shares of CHX, par value $.01 per share, which represents all of
the issued and outstanding shares of capital stock of CHX. CHX Holdings
is also the sole member of CHXBD, LLC (``CHXBD''), the Exchange's
affiliated routing broker.
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    \10\ CHX became a wholly-owned subsidiary of CHX Holdings
pursuant to the Exchange's demutualization as approved by the
Commission in February 2005. See Securities Exchange Act Release No.
51149 (February 8, 2005), 70 FR 7531 (February 14, 2005) (order
approving SR-CHX-2004-26 and Amendment No. 1 and accelerated
approval of Amendment No. 3).
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    CHX Holdings is beneficially owned by 193 firms or individuals,
including Participants \11\ or affiliates of Participants, many of whom
were former seat holders on the Exchange prior to its demutualization
in 2005.\12\ Moreover, four firms hold Series A Preferred Stock and
seven individuals hold Series B Preferred Stock. No firm, individual,
or group of affiliated firms or individuals beneficially own 10 percent
or more of CHX Holdings on an as-converted basis.
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    \11\ A ``Participant'' is a ``member'' of the Exchange for
purposes of the Act. See CHX Article 1, Rule 1(s).
    \12\ See supra note 10.
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Proposed Ownership Structure
    Pursuant to the terms of a Merger Agreement dated February 4, 2016
(``Merger Agreement'') by and among NA Casin Holdings, Merger Sub,
Chongqing Casin Enterprise Group Co., LTD. (``Chongqing Casin''), a
limited company organized under the laws of the People's Republic of
China (``PRC''), Richard G. Pane solely in his capacity as the
Stockholders Representative thereunder, and CHX Holdings, Merger Sub
will merge into CHX Holdings,\13\ which will then become a wholly-owned
direct subsidiary of NA Casin Holdings. Current CHX Holdings
stockholders will receive the right to receive cash in exchange for
their shares. Consummation of the Transaction (``Closing'') is subject
to satisfaction of customary conditions for a transaction of this
nature, including approval of this proposed rule change by the
Commission.\14\
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    \13\ Under the terms of the Merger Agreement, the CHX Holdings
Certificate and Bylaws in effect immediately prior to the effective
time of the Transaction, which shall be prior to the Closing, shall
be the Certificate and Bylaws of the surviving corporation, as
amended by this proposed rule change.
    \14\ Conditions precedent to Closing are formal requirements set
forth in the Merger Agreement that must be satisfied or waived on or
prior to the Closing date. These conditions include any (i) filing
and consents under the Securities Act of 1933, the Exchange Act and
the rules and regulations promulgated thereunder, and any other
filings required to be made with and consents required be obtained
from the SEC, confirming the approval of the SEC of the Transaction,
(ii) filings required to be made with and consents required be
obtained from any self-regulatory organizations, (iii) filings and
consents necessary to comply with foreign and state securities and
``blue sky'' laws, (iv) receipt of Committee on Foreign Investment
in the United States (``CFIUS'') Approval, and (v) receipt of the
PRC consent, the absence of any of which would prohibit the
consummation of the Transaction.
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    Upon the Closing, all of the outstanding and issued shares of NA
Casin Holdings will be held by the following firms and individuals
(``Indirect Upstream Owners'' and with NA Casin Holdings ``Upstream
Owners'') in the following percentages: \15\
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    \15\ Pursuant to Rule 6a-2 under the Act, the Exchange will,
within 10 days after the Closing, amend its Form 1 (APPLICATION FOR,
AND AMENDMENTS TO APPLICATION FOR REGISTRATION AS A NATIONAL
SECURITIES EXCHANGE OR EXEMPTION FROM REGISTRATION PURSUANT TO
SECTION 5 OF THE EXCHANGE ACT) filed with the Commission. Exhibit K
of Form 1, which is applicable only to ``. . . exchanges that have
one or more owners, shareholders, or partners that are not also
members of the exchange . . .'', requires the Exchange to provide a
list of each shareholder that directly owns 5% or more of a class of
a voting security of the Exchange. As noted above, the Exchange
proposes that 100% of the issued and outstanding shares of CHX will
be directly owned by CHX Holdings.
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     Non-U.S. Indirect Upstream Owners:

[cir] NA Casin Group, a corporation incorporated under the laws of the
State of Delaware and wholly-owned by Chongqing Casin--20%
[cir] Chongqing Jintian Industrial Co., Ltd. (``Chongqing Jintian''), a
corporation incorporated under the laws of the PRC--15%
[cir] Chongqing Longshang Decoration Co., Ltd. (``Chongqing
Longshang''), a corporation incorporated under the laws of the PRC--
14.50%
     U.S. Indirect Upstream Owners:

[cir] Castle YAC Enterprises, LLC (``Castle YAC''), a limited liability
company organized under the laws of the State of New York, the sole
member of which is Mr. Jay Lu, a U.S. citizen and Vice President of NA
Casin Group--19%

[cir] Raptor, a limited liability company organized under the laws of
the State of Delaware--11.75%
[cir] Saliba, a limited liability company organized under the laws of
the State of Illinois--11.75%
[cir] Xian Tong Enterprises, Inc. (``Xian Tong''), a corporation
incorporated under the laws of the State of New York--6.94%
[cir] Equity Incentive Shares to five members of the CHX Holdings
management team, all U.S. citizens--0.88%
[cir] Cheevers & Co., Inc. (``Cheevers''), a corporation incorporated
under the laws of the State of Illinois--0.18%

    The Exchange submits the following regarding the Indirect Upstream
Owners: \16\
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    \16\ An opinion of counsel in support of each of these
assertions has been provided to the Commission by outside counsel
for the Exchange.
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     The only Related Persons \17\ among the Indirect Upstream
Owners are Castle YAC and NA Casin Group.\18\
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    \17\ As used herein, ``Related Persons'' shall mean: (1) With
respect to any Person, any executive officer (as such term is
defined in Rule 3b-7 under the Securities Exchange Act of 1934
(``Exchange Act'')), director, general partner, manager or managing
member, as applicable, and all ``affiliates'' and ``associates'' of
such Person (as those terms are defined in Rule 12b-2 under the
Exchange Act), and other Person(s) whose beneficial ownership of
shares of stock of the Corporation with the power to vote on any
matter would be aggregated with such first Person's beneficial
ownership of such stock or deemed to be beneficially owned by such
first Person pursuant to Rules 13d-3 and 13d-5 under the Exchange
Act; and (2) in the case of any Person constituting a member (as
that term is defined in Section 3(a)(3)(A) of the Exchange Act) of
CHX (defined in the Rules of the Chicago Stock Exchange, Inc. (``CHX
Rules''), as such rules may be amended from time to time, as a
``Participant'') for so long as CHX remains a registered national
securities exchange, such Person and any broker or dealer with which
such Person is associated; and (3) any other Person(s) with which
such Person has any agreement, an arrangement or understanding
(whether or not in writing) to act together for the purpose of
acquiring, voting, holding or disposing of shares of the stock of
the Corporation; and (4) in the case of a Person that is a natural
person, any relative or spouse of such Person, or any relative of
such spouse, who has the same home as such Person or who is a
director or officer of the Corporation or any of its parents or
subsidiaries. See Section (b) of Article FOURTH of the proposed CHX
Holdings Certificate; see also Section (4) of Article IX of the
proposed NA Casin Holdings Certificate.
    \18\ Mr. Jay Lu, the sole member of Castle YAC, is associated
with an affiliate of Chongqing Casin and is also the son of Mr.
Shengju Lu, the Chairman of Chongqing Casin.
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     There are no other Related Persons among the Indirect
Upstream Owners.
     None of the Indirect Upstream Owners directly, or
indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, a governmental entity
or any political subdivision thereof.
    As Related Persons, NA Casin Group and Castle YAC would own a
combined 39% voting interest in NA Casin Holdings and, by extension,
CHX Holdings, which is within the proposed 40% Concentration Limitation
of NA Casin Holdings and CHX Holdings, as described below.\19\ However,
NA Casin Group and Castle YAC will not be permitted to exercise their
collective voting interest in excess of the proposed 20% Voting
Limitations of NA Casin Holdings and CHX Holdings, as described
below.\20\
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    \19\ See Section (9) of Article IX of the proposed NA Casin
Holdings Certificate; see also Article FOURTH, paragraph (c)(i) of
the proposed CHX Holdings Certificate. As described in detail below,
the Exchange proposes to adopt similar Ownership and Voting
Limitations for NA Casin Holdings and CHX Holdings.
    \20\ See Section (5) of Article IX of the proposed NA Casin
Holdings Certificate; see also Article FOURTH, paragraph (b)(i) of
the proposed CHX Holdings Certificate.
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    The Exchange submits that execution of the proposed NACH
Stockholders' Agreement would not result in the parties to the
agreement becoming Related Persons for the purposes of compliance with
the proposed Ownership and Voting Limitations of NA Casin Holdings and
CHX Holdings (``Ownership and Voting Limitations''). Generally, the
proposed NACH Stockholders' Agreement includes provisions governing the
relationship between the Indirect Upstream Owners, which are intended
to protect the ownership interests of the respective individual
Indirect Upstream Owners. While the proposed NACH Stockholders'
Agreement includes various transfer of shares provisions,\21\ the
agreement does not contain any provisions, such as lock-up, drag-along
or tag-along rights, which could result in the Indirect Upstream Owners
becoming Related Persons.22 23 Accordingly, the Exchange
believes that the NACH Stockholders' Agreement would not result in the
parties to the agreement becoming Related Persons for the purposes of
compliance with the proposed Ownership and Voting Limitations.
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    \21\ See Sections 4.02 (Right of First Offer), 4.03 (Rights to
Acquire Interest Upon Change of Control), Section 6.02 (Right to
Purchase New Securities) of the proposed NACH Stockholders'
Agreement.
    \22\ Specifically, the Right of First Offer, Rights to Acquire
Interest Upon Change of Control and the Right to Purchase New
Securities contained in the NACH Stockholders' Agreement would not
render it an ``agreement, an arrangement or understanding (whether
or not in writing) to act together for the purpose of acquiring,
voting, holding or disposing of shares of the stock of the
Corporation.'' See Section (4)(iii) of Article IX of the proposed NA
Casin Holdings Certificate.
    \23\ See supra note 17.
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    The Exchange further notes that execution of the Saliba Put
Agreement or the Raptor Put Agreement would not result in any Indirect
Upstream Owners becoming Related Persons for the purposes of compliance
with the proposed Ownership and Voting Limitations. Specifically, the
Saliba Put Agreement grants Saliba a put option (``Saliba Put Option'')
that, if exercised by Saliba, would compel NA Casin Holdings (and not
another Indirect Upstream Owner) to purchase, or arrange for an
unspecified third-party to purchase, a specified amount of Saliba's
equity interest in NA Casin Holdings. Similarly, the Raptor Put
Agreement grants Raptor a put option (``Raptor Put Option'') that, if
exercised by Raptor, would compel NA Casin Holdings (and not another
Indirect Upstream Owner) to purchase, or arrange for an unspecified
third-party to purchase, a specified amount of Raptor's equity interest
in NA Casin Holdings. Accordingly, the Exchange submits that execution
of the Saliba Put Agreement or the Raptor Put Agreement would not
result in the parties to the agreement becoming Related Persons for the
purposes of compliance with the proposed Ownership and Voting
Limitations.\24\ The Exchange also notes that the exercise of the put
options under either the Saliba Put Agreement or the Raptor Put
Agreement would be subject to, among other things, compliance with the
proposed Ownership and Voting Limitations.\25\
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    \24\ Specifically, the put agreements do not constitute an
``agreement, an arrangement or understanding (whether or not in
writing) to act together for the purpose of acquiring, voting,
holding or disposing of shares of the stock of the Corporation.''
See Section (4)(iii) of Article IX of the proposed NA Casin Holdings
Certificate.
    \25\ See Section 3(c) of the Saliba Put Agreement; see also
Section 3(c) of the Raptor Put Agreement.
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    Following the Closing, CHX will remain a Delaware for-profit stock
corporation, with authority to issue 1,000 shares of common stock, all
of which will remain owned by CHX Holdings.\26\ Moreover, CHX Holdings
shall have the authority to issue 1,000 shares of common stock, all of
which will be owned by NA Casin Holdings.\27\ CHX will also remain
registered as a national securities exchange under Section 6 of the Act
\28\ and a self-regulatory organization (``SRO'') as defined in Section
3(a)(26) of the Act.\29\ CHX Rules will remain in full force and effect
as of the date of the instant rule filing, will continue to govern the
activities of CHX up to and after the Closing and CHX will continue to

discharge its SRO responsibilities pursuant to CHX's registration under
Section 6 of the Act. Assuming that the Closing occurs, CHX Holdings
represents that it will at all times ensure that the Exchange has
access to financial resources sufficient for it to discharge its SRO
responsibilities after the date of Closing.
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    \26\ See Article FOURTH of the proposed CHX Certificate.
    \27\ See Article FOURTH of the proposed CHX Holdings
Certificate.
    \28\ 15 U.S.C. 78f.
    \29\ 15 U.S.C. 78c(a)(26).
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    Following the Closing, CHXBD will remain a Delaware limited
liability corporation of which CHX Holdings will remain the sole
member. Pursuant to Article 19, Rule 2 of CHX Rules, CHXBD provides the
outbound routing of orders from the Exchange to other trading centers.
CHXBD operates a facility (as defined in Section 3(a)(2) of the
Exchange Act) \30\ of the Exchange. The Financial Industry Regulatory
Authority (``FINRA''), an SRO unaffiliated with the Exchange or any of
its affiliates, carries out oversight and enforcement responsibilities
as the designated examining authority designated by the Commission
pursuant to Section 17d-1 of the Act \31\ with the responsibility for
examining CHXBD for compliance with the applicable financial
responsibility rules. As provided in Article 19, Rule 2(a)(3), a
Participant's use of CHXBD to route orders to another trading center is
optional; any Participant that does not wish to use CHXBD may use other
routers to route orders to other trading centers. Further, as provided
in Article 19, Rule 2(a)(6) of CHX Rules, the books, records, premises,
officers, agents, directors and employees of CHXBD as a facility of the
Exchange are deemed to be those of the Exchange for purposes of, and
oversight pursuant to, the Act, and the books and records of CHXBD as a
facility of the Exchange are at all times subject to inspection and
copying by the Exchange and by the Commission.
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    \30\ 15 U.S.C. 78c(a)(2).
    \31\ 15 U.S.C. 78q(d)(1).
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    The Exchange states that all of the provisions of Article 19, Rule
2 of CHX Rules governing the operation of CHXBD will remain in full
force and effect at all times prior to and after the Closing. The
Exchange, on behalf of CHXBD, will provide notice to, and obtain any
required consents from, FINRA, for the Transaction.
Proposed CHX Certificate and Bylaws Generally
    The Exchange proposes to retain most of the current provisions of
the CHX Certificate and Bylaws, except that the Exchange proposes to
amend certain requirements regarding CHX's board and committee
composition and procedures to be largely similar to the board and
committee composition requirements and procedures of the National Stock
Exchange, Inc. (``NSX'').\32\
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    \32\ See Articles III and V of the NSX By-Laws. NSX is a
registered national securities exchange. In 2015, the Commission
approved a transaction involving NSX. See Exchange Act Release No.
74270 (February 13, 2015), 80 FR 9286 (February 20, 2015) (Approval
Order for SR-NSX-2014-017); see also Exchange Act Release No. 73944
(December 24, 2014), 80 FR 85 (January 2, 2015) (SR-NSX-2014-017).
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    Initially, the Exchange proposes the following non-substantive
amendments to the CHX Certificate:
     Amend the title to CHX Certificate to reflect ``Amended
and Restated Certificate of Incorporation of the Chicago Stock
Exchange, Inc.''
     Add an attestation clause and signature block to the end
of the proposed CHX Certificate.
    The Exchange also proposes the following non-substantive amendments
to the CHX Bylaws:
     Move Articles I through XI of the current CHX Bylaws to
Article II through XII of the proposed CHX Bylaws, in light of the
adoption of the definitions under Article I of the proposed CHX Bylaws,
as discussed below, and amend all citations to reflect the new Article.
     Amend references to each section under an Article to
reflect the Article to which it is associated (e.g., current Article I,
``Sec. 1'' is proposed ``Section 1.1'').
CHX Board Composition Requirements and Procedures
    As discussed in detail below, the proposed CHX board and committee
composition and procedure requirements are similar to the board and
committee composition and procedure requirements of NSX,\33\ except
that the proposed CHX requirements:
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    \33\ See id.
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     include a new board composition requirement that at least
20% of the CHX Board be comprised of CHX Holdings Directors, which is
not an NSX requirement; \34\
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    \34\ Section 1.1(s) of the proposed CHX Bylaws defines ``CHX
Holdings Director'' as ``a member of the Board who is a director of
CHX Holdings, Inc.''
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     require a minimum of ten CHX Board directors, as opposed
to a minimum of seven NSX board directors;
     maintain the current position of Vice Chairman and
associated responsibilities, which is not an NSX requirement; and
     maintain current procedures for selecting members of CHX
Board committees, current composition requirements for CHX Board
committees (e.g., different composition requirements for the respective
Executive Committees \35\) and does not require the establishment of an
Appeals Committee or a Business Conduct Committee, all of which differ
from the analagous NSX requirements.
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    \35\ See Section 5.5 of the proposed CHX Bylaws; see also
Section 5.5 of Article V of the NSX By-Laws.
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    Initially, the Exchange proposes to adopt Article I of the proposed
CHX Bylaws to provide definitions for certain terms used throughout the
proposed CHX Bylaws, which are largely similar to the terms and
definitions under Article I of the Third Amended and Restated By-Laws
of NSX (``NSX By-Laws'').\36\
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    \36\ See supra note 32.
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    Article II and Article IV of the current CHX Bylaws and Article
FIFTH of the current CHX Certificate provide, among other things, CHX
Board composition and procedure requirements, the key provisions of
which include the following:
     The CHX Board shall consist of not fewer than ten (10) and
not more than sixteen (16) directors (``CHX Directors'') divided into
three classes, with the term of office of one class expiring each
year.\37\
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    \37\ See Section 2(a) of Article II of the current CHX Bylaws.
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     The CHX Board shall consist of the following: \38\
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    \38\ See Section 2(b) of Article II of the current CHX Bylaws.
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    [cir] The Chief Executive Officer (``CEO'') of the CHX;
    [cir] Public Directors,\39\ who shall equal one-half the number of
directors comprising the entire CHX Board (rounded up to the next whole
number); and
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    \39\ Article II, Section 2(b) of the current CHX Bylaws defines
``Public Director'' as a director who (i) is not a Participant, or
an officer, managing member, partner or employee of an entity that
is a Participant, (ii) is not an employee of the Corporation or any
of its affiliates, (iii) is not broker or dealer or an officer or
employee of a broker or dealer, or (iv) does not have any other
material business relationship with (x) CHX Holdings, Inc., the
Corporation or any of their affiliates or (y) any broker or dealer.
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    [cir] Participant Directors.\40\
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    \40\ Article II, Section 2(b) of the current CHX Bylaws defines
``Participant Director'' as ``a director who is a Participant or an
officer, managing member or partner of an entity that is a
Participant'' and the term ``Participant'' means ``any individual,
corporation, partnership or other entity that holds a permit issued
by the Corporation to trade securities on the market operated by the
Corporation.'' See supra note 11.
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     The Chairman of the CHX Board shall be either the CEO of
CHX or a Public Director and if the CEO of CHX is the Chairman of the
CHX Board, the CEO may not hold any other office at CHX.\41\
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    \41\ See Section 4(a) of Article II of the current CHX Bylaws.

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     The Nominating and Governance Committee shall nominate
directors for each director position standing for election, provided
that candidates for STP Director positions may also be nominated by
Participants.\42\
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    \42\ See Section 3(b) and (e) of Article II of the current CHX
Bylaws.
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     CHX Directors are elected to full three-year terms at the
annual meeting of stockholders at which a quorum is present by a
plurality of the votes cast.\43\
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    \43\ See Section 2(c) of Article II of the current CHX Bylaws;
see also Section 9 of Article III of the current CHX Bylaws.
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     Vacancies are generally filled only with a person
nominated by the Chairman and Vice Chairman and elected by a majority
of the directors then in office, though less than a quorum or by a sole
remaining director, provided that the CHX Board composition
requirements are met.\44\ A director chosen to fill a vacancy shall
hold office until end of the the next annual meeting of
stockholders.\45\
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    \44\ See Section 6 of Article II of the current CHX Bylaws.
    \45\ See id.
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     Members of the CHX Board (``CHX Directors'') may only be
removed for cause.\46\
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    \46\ See Section (f) of Article FIFTH of the current CHX
Certificate.
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    The Exchange now proposes various amendments to the CHX Board
composition requirements, which include the following key amendments:
\47\
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    \47\ The Exchanges notes that the following provisions under the
current CHX Certificate are being deleted as they are being
superseded by new provisions under the proposed CHX Bylaws: Sections
(b) and (c) of Article FIFTH of the current CHX Certificate is
replaced by Section 3.2 of the proposed CHX Bylaws; Section (d) of
Article FIFTH of the current CHX Certificate is replaced by Section
3.3 of the proposed CHX Bylaws; Section (f) of Article FIFTH of the
current CHX Certificate is replaced by Section 3.8 of the proposed
CHX Bylaws; and Section (g) of Article FIFTH of the current CHX
Certificate is replaced by Section 3.7 of the proposed CHX Bylaws.
---------------------------------------------------------------------------

     The CHX Board shall consist of not fewer than ten (10) and
not more than twenty-five (25) CHX Directors and shall not be divided
into classes. NSX requires at least seven directors.\48\ The Exchange
is proposing to maintain the current minimum requirement of 10 CHX
Directors as that is the minimum number of directors that would permit
the Exchange to meet the proposed CHX Board composition requirements,
as described immediately below.
---------------------------------------------------------------------------

    \48\ See Section 3.2(a) of the proposed CHX Bylaws; see also
Section 3.2 of Article III of the NSX By-Laws.
---------------------------------------------------------------------------

     The CHX Board shall be comprised of: \49\
---------------------------------------------------------------------------

    \49\ See Section 3.2(b) of the proposed CHX Bylaws.
---------------------------------------------------------------------------

    [cir] The CEO of the CHX;
    [cir] at least 50% Non-Industry Directors \50\ (at least one of
whom shall be an Independent Director \51\);
---------------------------------------------------------------------------

    \50\ Section 1.1(n) of the proposed CHX Bylaws defines ``Non-
Industry Director'' as ``a member of the Board who is (1) an
Independent Director; or (2) any other individual who would not be
an Industry Director.'' In turn, Section 1.1(m) of the proposed CHX
Bylaws defines ``Industry Director'' as ``a member of the Board who
(1) is or has served in the prior three years as an officer,
director, or employee of a broker or dealer, excluding an outside
director or a director not engaged in the day-to-day management of a
broker or dealer; (2) is an officer, director (excluding an outside
director), or employee of an entity that owns more than ten percent
of the equity of a broker or dealer, and the broker or dealer
accounts for more than five percent of the gross revenues received
by the consolidated entity; (3) owns more than five percent of the
equity securities of any broker or dealer, whose investments in
brokers or dealers exceed ten percent of his or her net worth, or
whose ownership interest otherwise permits him or her to be: Engaged
in the day-to-day management of a broker or dealer; (4) provides
professional services to brokers or dealers, and such services
constitute 20 percent or more of the professional revenues received
by the member of the Board or 20 percent or more of the gross
revenues received by the member of the Board's firm or partnership;
(5) provides professional services to a director, officer, or
employee of a broker, dealer, or corporation that owns 50 percent or
more of the voting stock of a broker or dealer, and such services
relate to the director's, officer's, or employee's professional
capacity and constitute 20 percent or more of the professional
revenues received by the member of the Board or member or 20 percent
or more of the gross revenues received by the member of the Board's
or member's firm or partnership; or (6) has a consulting or
employment relationship with or provides professional services to
the Exchange or any affiliate thereof or has had any such
relationship or provided any such services at any time within the
prior three years. The proposed definition is virtually identical to
the definition of ``Industry Director'' under the NSX By-Laws. See
Section 1.1 of the NSX By-Laws.
    \51\ Section 1.1(l) of the proposed CHX Bylaws defines
``Independent Director'' as ``a member of the Board that the Board
has determined to have no material relationship with the Exchange or
any affiliate of the Exchange or any Participant or any affiliate of
any such Participant other than as a member of the Board.''
---------------------------------------------------------------------------

    [cir] at least 20% Participant Directors; \52\ and
---------------------------------------------------------------------------

    \52\ Section 1.1(g) of the proposed CHX Bylaws defines
``Participant Director'' as ``a director who is a Participant or a
director, officer, managing member or partner of an entity that is
or is an affiliate of, a Participant.''
---------------------------------------------------------------------------

    [cir] at least 20% CHX Holdings Directors.\53\
---------------------------------------------------------------------------

    \53\ The Exchange believes that requiring at least 20% of the
CHX board be comprised of CHX Holdings Directors will promote
governance efficiencies between CHX Holdings and CHX that will
operate to enhance the governance and operation of the Exchange as
an SRO. The Exchange notes that the bylaws of NYSE Market (DE),
Inc., a parent of NYSE MKT, LLC, a national securities exchange,
requires a majority of its board be comprised of board members of an
indirect parent; provided that such members meet certain
independence and domicile requirements. See Article III, Section
1(A) of the Fourth Amended and Restated Bylaws of the NYSE Market
(DE), Inc. The Exchange further notes that the NSX does not have a
similar requirement.
---------------------------------------------------------------------------

     The Chairman of the CHX Board may be the CEO and/or
President of CHX or a Non-Industry Director.\54\
---------------------------------------------------------------------------

    \54\ See Section 3.4 of the proposed CHX Bylaws; see also
Section 3.6 of the NSX By-Laws.
---------------------------------------------------------------------------

     The CHX Director term shall be one year, except that the
term of the CEO of CHX shall expire when such individual ceases to be
the CEO of the CHX.\55\ The Exchange believes that this change will
facilitate compliance with the proposed board composition requirements,
which is more specific than the current requirements.
---------------------------------------------------------------------------

    \55\ See Section 3.3 of the proposed CHX Bylaws; see also
Section 3.4 of the NSX By-Laws.
---------------------------------------------------------------------------

     Eliminate the ``STP Participant Director'' positions and
corresponding nominating and selection process and replace with a
simplified Participant Director nominating process, whereby the
Participant Director Nominating Committee \56\ shall recommend
individual(s) to the Board from which the stockholders will elect the
required number of Participant Directors at the annual meeting of
stockholders.
---------------------------------------------------------------------------

    \56\ See Section 5.11 of the proposed CHX Bylaws.
---------------------------------------------------------------------------

     Adopt a CHX Holdings Director nomination and selection
process that is virtually identical to the proposed Participant
Director nominating and selection process, except that candidates for
the CHX Holdings Director positions shall be selected by the CHX
Holdings Board.\57\
---------------------------------------------------------------------------

    \57\ See Sections 3.6 and 5.2 of the proposed CHX Bylaws; see
also Sections 3.5 and 5.2 of the NSX By-Laws.
---------------------------------------------------------------------------

     CHX Directors may be removed from office by a vote of the
stockholders at any time with or without cause; provided, however, that
any Participant Director or CHX Holdings Director may only be removed
for cause.\58\ The Exchange believes that this change will provide
stockholders with recourse in the event the best interest of the
Exchange requires the removal of a director who could not be removed
for cause.
---------------------------------------------------------------------------

    \58\ Section 3.7 of the proposed CHX Bylaws provides that for
``the purposes of Section 3.7 only, `cause' shall mean shall mean
only (a) a breach of a director's duty of loyalty to the Corporation
or its stockholders, (b) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law,
(c) actions resulting in liability under Section 174 of the General
Corporation Law of Delaware, or (d) transactions from which a
director derived an improper personal benefit. Any director may be
removed for cause by the holders of a majority of the shares of
capital stock then entitled to be voted at an election of directors.
---------------------------------------------------------------------------

     Adopt Chairman of the CHX Board,\59\ CHX Board Vacancy
\60\ and

CHX Board Quorum and Action \61\ provisions that are similar to the
analagous provisions under the NSX By-Laws, except that the proposed
CHX Board Vacancy provisions contemplate procedures for filing
vacancies for CHX Holdings Directors that are not found under the NSX
By-Laws.
---------------------------------------------------------------------------

    \59\ See Section 3.4 of the proposed CHX Bylaws; see also
Section 3.6 of the NSX By-Laws.
    \60\ See Section 3.7 of the proposed CHX Bylaws; see also
Section 3.7 of the NSX By-Laws.
    \61\ See Section 3.13 of the proposed CHX Bylaws; see also
Section 3.12 of the NSX By-Laws.
---------------------------------------------------------------------------

    Incidentally, the Exchange proposes to delete Sections (b) through
(d), (f) and (g) of Article FIFTH of the current CHX Certificate, as
the provisions are obviated by the proposed amendments reflected in the
proposed CHX Bylaws.\62\ The Exchange proposes to maintain Section (e)
of Article FIFTH of the current CHX Certificate, but to move the
provision to Section (b) of Article FIFTH of the proposed CHX
Certificate.\63\
---------------------------------------------------------------------------

    \62\ See supra note 47.
    \63\ The CHX Director election requirements may also be found
under Section 4.9 of the proposed CHX Bylaws.
---------------------------------------------------------------------------

    The Exchange also proposes to amend Article IV of the current CHX
Bylaws regarding CHX Committees. The current key requirements for CHX
Committees are as follows:
     The CHX Bylaws currently require the following CHX
Committees: Executive Committee; Nominating and Governance Committee;
Audit Committee; Compensation Committee; Regulatory Oversight
Committee; Finance Committee; Judiciary Committee; and other CHX
Committees as may be provided in the bylaws or CHX Rules or as may be
from time to time established by the CHX Board.\64\
---------------------------------------------------------------------------

    \64\ See Section 1 of Article IV of the current CHX Bylaws.
---------------------------------------------------------------------------

     Members of the CHX Committees are selected (1) by the
Chairman and/or Vice Chairman of the CHX Board with approval of the CHX
Board; (2) by the Vice Chairman of the CHX Board with approval of the
Public Directors of the CHX Board--for the Regulatory Oversight
Committee; (3) by the CEO of CHX alone--for the Judiciary Committee; or
(4) by the CHX Board alone--for the Nominating and Governance
Committees, subject to composition requirements, as described under
current Article 2 of the CHX Rules.\65\ In contrast, all committees of
the NSX Board are selected by the Chairman with approval of the NSX
Board.\66\
---------------------------------------------------------------------------

    \65\ See Section 2 of Article IV of the current CHX Bylaws.
    \66\ See Section 5.2 of the NSX By-Laws.
---------------------------------------------------------------------------

    The Exchange proposes to maintain the current requirements for the
CHX Committees with the following amendments:
     Move Article 2, Rules 2-4, 8-9, and 11-12 of the current
CHX Rules \67\ and restate them under Article V of the proposed CHX
Bylaws as Sections 5.5 through 5.10 and 5.12 of the proposed CHX Bylaws
with amendments (1) to contemplate the proposed CHX board composition
requirements of Article III of the proposed CHX Bylaws and (2) to
require that the Regulatory Oversight Committee consist of at least
five members, all of whom must be Non-Industry Directors, the later
requirement being similar to a requirement of NSX that ``[t]he
Regulatory Oversight Committee shall at all times be comprised entirely
of Non-Industry Directors.'' 68 69 Thus, Article 2 of the
proposed CHX Rules will only include rules describing the current CHX
Committees that are comprised solely of Participants.\70\
---------------------------------------------------------------------------

    \67\ The Exchange proposes to eliminate Article 2, Rule 6 of the
current CHX Rules as it is currently reserved.
    \68\ Section 5.6 of the NSX By-Laws.
    \69\ While all members of the current Regulatory Oversight
Committee are Public Directors, Article 2, Rule 4 (Regulatory
Oversight Committee) of the current CHX Rules only requires that a
minimum of five members be Public Directors. See supra note 39. The
Exchange believes that explicitly requiring all members of the
Regulatory Oversight Committee to be Non-Industry Directors will
serve to better avoid conflicts of interest between members of the
Regulatory Oversight Committee and Participants.
    \70\ The Exchange propose the following amendments to Article 2
of the current CHX Rules: Amend title from ``Committees'' to
``Participant Committees;'' delete current CHX Article 2, Rule 1 as
the rule is redundant of, and obviated by, provisions in the
proposed CHX Bylaws; proposed CHX Article 2, Rule 1 (current CHX
Article 2, Rule 5) describes the Committee on Exchange Procedure,
and the Exchange proposes non-substantive amendments the current CHX
Article 2, Rule 5 to replace references to ``Exchange Procedure
Committee'' with the more accurate and consistent ``Committee on
Exchange Procedure;'' and proposed CHX Article 2, Rule 2 (current
CHX Article 2, Rule 7) describes the Judiciary Committee; proposed
CHX Article 2, Rule 3 (current CHX Article 2, Rule 10) describes the
Participant Advisory Committee.
---------------------------------------------------------------------------

     Adopt Section 3.6 of the proposed CHX Bylaws, which
provide CHX Director nomination and election provisions similar to
analagous provisions under the NSX By-Laws.\71\ Generally, paragraph
(a) and (b) thereunder provides that the Nominating and Governance
Committee each year shall nominate directors for each director position
standing for election at the annual meeting of stockholders that year.
In addition, with respect to the nomination and election of CHX
Holdings and Participant Directors:
---------------------------------------------------------------------------

    \71\ See Section 3.5 of the NSX By-Laws.
---------------------------------------------------------------------------

    [cir] Paragraph (b) thereunder provides that the Nominating and
Governance Committee will only nominate persons (1) for Participant
Director positions who have been approved and submitted by the
Participant Director Nominating Committee and (2) for CHX Holdings
Director positions who have been approved and submitted by the CHX
Holdings Board.
    [cir] Paragraph (c) thereunder provides that the Participant
Director Nominating Committee shall consult with the Nominating and
Governance Committee, the Chairman of the CHX Board and the CEO of CHX,
as well as solicit comments from Participants, for the purpose of
identifying Participant Director nominees. The list of Participant
Director nominees (``initial nominees'') shall be submitted to the
Nominating and Governance Committee no later than 75 days prior to the
date announced for the annual meeting of stockholders.
    [cir] Paragraph (d) thereunder provides that the Nominating and
Governance Committee shall provide the Secretary of CHX the initial
nominees no later than 60 days prior to the date announced for the
annual meeting of stockholders. The Participants may also identify
other candidates (``additional candidates''), subject to specific
conditions and requirements.
    [cir] Paragraph (e) thereunder provides that if additional
candidates are identified and validly presented to the Secretary of
CHX, the Secretary of CHX shall notify all Participants of the list of
initial nominees and additional candidates, as well as the date and
time of the Participant Director election, no later than 20 days prior
the date announced for the annual meeting of stockholders. Paragraph
(e) further provides specific Participant voting requirements,
procedures and limitations.
    [cir] Paragraph (f) thereunder provides that if no additional
candidates are received by the date that is 35 days prior to the date
announced for the annual meeting of stockholders, the initial nominees
shall be deemed to be the persons approved by the Participants as
Participant Director nominees and the Secretary of CHX shall so notify
the Nominating and Governance Committee.
     Adopt Section 5.11 of the proposed CHX Bylaws describing
the Participant Director Nominating Committee, which is virtually
identical Section 5.7 of the NSX By-Laws.\72\
---------------------------------------------------------------------------

    \72\ See supra note 32.
---------------------------------------------------------------------------

    The Exchange also proposes to amend current Section 2 of Article II
(Special Meetings) of the current CHX Bylaws (i.e., Section 4.2 of the
proposed CHX Bylaws) (1) to clarify that a special meeting of the
stockholders may be called ``at any time'' by the CEO or the

CHX Board and (2) to permit a special meeting of the stockholders to be
called ``upon written notice to the Corporation by the stockholders
holding one-third of the votes entitled to be cast'' (``CHX
stockholder-called special meeting provision'').73 74 Given
that there will be 13 Indirect Upstream Owners of the Exchange, the
Exchange submits that the CHX stockholder-called special meeting
provision would facilitate the calling of special meetings of the
stockholders, which would promote stockholder communication and
transparency. The Exchange notes that while the proposed stockholder-
called special meeting provision may result in a special meeting being
called by as few as three Indirect Upstream Owners, any action by the
stockholders during a special meeting would be subject to the general
quorum and voting requirements of Section 4.9 of the proposed CHX
Bylaws, which requires, among other things, that the majority of the
total votes which all of the outstanding stock of the Corporation would
be entitled to cast at the meeting to be present, in person or by
proxy, to constitute a quorum.
---------------------------------------------------------------------------

    \73\ As described below, the Exchange is also proposing to adopt
virtually identical amendments to Section 4.2 of the proposed CHX
Holdings Bylaws.
    \74\ The Exchange also notes that the CHX stockholder-called
special meeting provision is different from Section 2.2 of the
proposed NA Casin Holdings Bylaws and Section 4.2 of the NSX By-
Laws, both of which permit a special meeting of the stockholders to
be called by a majority of the stockholders and Section 1.2 of the
By-Laws of NSX Holdings, Inc. (``NSX Holdings By-Laws''), which do
not permit stockholders to call a special meeting of the
stockholders.
---------------------------------------------------------------------------

Proposed CHX Holdings Certificate and Bylaws Generally
    The Exchange proposes to retain most of the current provisions of
the CHX Holdings Certificate and Bylaws, except that the Exchange
proposes to amend certain requirements regarding (1) board composition
and procedures; (2) Ownership and Voting Limitations to be similar to
those of NSX Holdings; \75\ and (3) special meetings to permit a
special meeting of the stockholders to be called upon written notice to
the Corporation by the stockholders holding one-third of the votes
entitled to be cast.
---------------------------------------------------------------------------

    \75\ See Section (B) of Article FOURTH and Article SEVENTH of
the Second Amended and Restated Certificate of Incorporation of NSX
Holding (``NSX Holdings Certificate''); see also Article II of the
NSX Holdings By-Laws; see also supra note 32. NSX Holdings is the
direct parent of the NSX.
---------------------------------------------------------------------------

    Initially, the Exchange proposes the following non-substantive
amendments to the CHX Holdings Certificate:
     Replace current Article FOURTH in its entirety with, among
other provisions described in detail below, language that provides that
the total number of shares of stock which CHX Holdings shall have
authority to issue is 1,000 shares of common stock having a par value
of $0.01 per share and that NA Casin Holdings shall be the sole owner
of this stock.
     Amend title to the CHX Holdings Certificate to state
``Third Amended and Restated Certificate of Incorporation of the
Chicago Stock Exchange, Inc.''
     Adopt caption paragraph above Article FIRST to reflect the
amendment history of the CHX Holdings Certificate.
     Move Article SIXTH of the current CHX Holdings Certificate
to Article FIFTH of the proposed CHX Holdings Certificate, due to the
proposed deletion of Article FIFTH of the current CHX Holdings
Certificate, as discussed below.
     Delete Article SEVENTH of the current CHX Holdings
Certificate as it contains obsolete information regarding the
incorporator.
     Move Articles EIGHTH through THIRTEENTH of the current CHX
Holdings Certificate to Articles SIXTH through ELEVENTH of the proposed
CHX Holdings Certificate, respectively, due to proposed deletions of
Articles FIFTH and SEVENTH of the current CHX Holdings Certificate.
Moreover, replace ``United States Securities and Exchange Commission''
with ``Commission,'' due to adoption of the shorthand reference of
``Commission'' for the ``United States Securities and Exchange
Commission'' under paragraph (b)(ii) of Article FOURTH of the proposed
CHX Holdings Certificate.
     Add attestation clause and signature block to the end of
the proposed CHX Holdings Certificate.
    The Exchange also proposes the following non-substantive amendments
to the CHX Holdings Bylaws:
     Amend reference to each section under an Article to
reflect the Article to which it is associated (e.g., current ``Article
I, Sec. 1'' would be proposed ``Section 1.1'') and associated cross-
references.
     Amend reference to the ``Securities Exchange Act of 1934''
under Section 3.1 of the proposed CHX Holdings Bylaws to note shorthand
reference to the ``Exchange Act'' and corresponding amendments to
Section 3.3 and Article VIII of the proposed CHX Holdings Bylaws to
replace references to either ``Securities Exchange Act of 1934'' or the
``Act'' with the ``Exchange Act.''
     Amend reference to the ``Chicago Stock Exchange, Inc.''
under Section 3.1 of the proposed CHX Holdings Bylaws to note shorthand
reference to ``CHX'' and corresponding amendments under Sections 3.1,
3.2, 3.5, 3.6, 7.5, 9.3 and Article VIII of the proposed CHX Holdings
Bylaws.
     Adopt shorthand reference of ``Commission'' for the
``United States Securities and Exchange Commission'' under Section 3.2
of the proposed CHX Holdings Bylaws and corresponding amendments under
Section 3.5 and Article VIII of the proposed CHX Holdings Bylaws.
    The Exchange further proposes to adopt Section (a) of Article
FOURTH of the proposed CHX Holdings Certificate to authorize the CHX
Holdings Board to create and issue options, warrants and other rights.
The Exchange believes that the proposed provision would facilitate the
ability of the CHX Holdings Board to raise additional capital for CHX
Holdings, which would in turn permit CHX Holdings to further capitalize
the Exchange so that the Exchange may continue to meet its regulatory
obligations. The Exchange notes that the proposed provision is
virtually identical to Section (A) of Article FOURTH of the NSX
Holdings Certificate.
CHX Holdings Board Composition Requirements and Procedures
    The Exchange proposes to substantively modify certain requirements
related to CHX Holdings Board composition and procedures, which is
similar to the board composition and procedures requirement of NSX
Holdings, as described below. Article SIXTH of the current CHX Holdings
Certificate and Articles II, IV and V of the current CHX Holdings
Bylaws provide, among other things, CHX Holdings Board composition and
procedure requirements, the relevant provisions of which include the
following:
     CHX Holdings Board shall consist of not less than 10 nor
more than 16 directors, divided into three classes, where one CHX
Holdings Director must be the CEO of CHX Holdings.\76\
---------------------------------------------------------------------------

    \76\ See Section 2 of Article II of the current CHX Holdings
Bylaws.
---------------------------------------------------------------------------

     The Nominating and Governance Committee, comprised of six
or more CHX Holdings Directors, shall nominate directors for the class
of directors standing for election each year. In the event a vacancy on
the CHX Holdings Board occurs between annual meeting of the
stockholders, the vacancy shall be filled only with a person nominated
by the Chairman and Vice Chairman and elected by a majority of the CHX
Holdings Directors then in office, though less than a quorum, except
that those vacancies resulting from removal from office by a vote of
the stockholders

for cause may be filled by a vote of the stockholders at the same
meeting at which such removal occurs.\77\
---------------------------------------------------------------------------

    \77\ See Sections 3 and 6 of Article II of the current CHX
Holdings Bylaws.
---------------------------------------------------------------------------

     CHX Holdings Directors are elected to full three-year
terms at the annual meeting of stockholders at which a quorum is
present by a plurality of the votes cast, with one class expiring each
year.\78\
---------------------------------------------------------------------------

    \78\ See Section 2(c) of Article II of the current CHX Holdings
Bylaws; see also Section 9 of Article IV of the current CHX Holdings
Bylaws.
---------------------------------------------------------------------------

     CHX Holdings directors may only be removed for ``cause''
\79\ by the holders of a majority of the shares of capital stock then
entitled to be voted at an election of directors.\80\
---------------------------------------------------------------------------

    \79\ Article SIXTH, Section (f) of the current CHX Holdings
Certificate defines ``cause'' only as ``(i) a breach of a director's
duty of loyalty to the Corporation or its stockholders, (ii) acts or
omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) actions resulting in liability
under Section 174 of the General Corporation Law of Delaware, or
(iv) transactions from which a director derived an improper personal
benefit.''
    \80\ See Section (f) of Article SIXTH of the current CHX
Holdings Certificate.
---------------------------------------------------------------------------

     Vacancies created on the CHX Holdings Board may only be
filled by a person nominated by the Chairman and Vice Chairman of CHX
Holdings and elected by a majority of the directors then in office,
though less than a quorum, except that those vacancies resulting from
removal from office by a vote of the stockholders for cause may be
filled by a vote of the stockholders at the same meeting at which such
removal occurs.\81\
---------------------------------------------------------------------------

    \81\ See Section 6 of Article II of the current CHX Holdings
Bylaws.
---------------------------------------------------------------------------

     All committees of CHX Holdings are appointed by the
Chairman and/or Vice Chairman, with the approval of the CHX Holdings
Board, except that members of the Nominating and Governance Committee
are appointed by the board of directors.\82\
---------------------------------------------------------------------------

    \82\ See Section 3 of Article II of the current CHX Holdings
Bylaws; see also Section 2 of Article V of the current CHX Holdings
Bylaws.
---------------------------------------------------------------------------

    The Exchange now proposes various amendments to the CHX Holdings
Board composition requirements and procedures to be similar to those of
NSX Holdings, which include the following key amendments: \83\
---------------------------------------------------------------------------

    \83\ The Exchanges notes that the following provisions under the
current CHX Holdings Certificate are being deleted as they are being
superseded by new provisions under the proposed CHX Holdings Bylaws
or obsolete: Sections (b) and (c) of Article SIXTH of the current
CHX Holdings Certificate is replaced by Section 2.2 of the proposed
CHX Holdings Bylaws; Section (d) of Article SIXTH of the current CHX
Holdings Certificate is replaced by Section 2.2(c) and (d) of the
proposed CHX Holdings Bylaws; Section (f) of Article SIXTH of the
current CHX Holdings Certificate is replaced by Section 2.16 of the
proposed CHX Holdings Bylaws; Section (g) of Article SIXTH of the
current CHX Holdings Certificate is being deleted as obsolete; and
Section (h) of Article SIXTH of the current CHX Holdings Certificate
is replaced by Section 2.6 of the proposed CHX Holdings Bylaws.
---------------------------------------------------------------------------

     Eliminate required minimum and maximum number of CHX
Holdings Directors and permit the number of CHX Holdings Directors to
be fixed by resolution of the CHX Holdings Board.\84\
---------------------------------------------------------------------------

    \84\ See Section 2.2(a) of the proposed CHX Holdings Bylaws; see
also Article SEVENTH of the NSX Holdings Certificate.
---------------------------------------------------------------------------

     Eliminate classes of CHX Holdings Directors and associated
three-year terms and replace with a general provision that each CHX
Holdings Director shall hold office until his or her successor is
elected and qualified or until his or her earlier resignation or
removal. CHX Holdings Directors shall continue to be elected at the
annual meeting of stockholders at which a quorum is present by a
plurality of the votes cast.\85\
---------------------------------------------------------------------------

    \85\ See Section 2.2(c) of the proposed CHX Holdings Bylaws; see
also Article SEVENTH of the NSX Holdings Certificate.
---------------------------------------------------------------------------

     Maintain the current CHX Holdings Director nominating
process via the Nominating and Governance Committee, but reduce the
number of required members of the Nominating and Governance Committee
to one or more directors, in light of the proposed elimination of the
required minimum/maximum number of CHX Holdings Directors. This would
harmonize the minimum CHX Holdings Board and committee member
requirements.
     Any CHX Holdings Director or the entire CHX Holdings Board
may be removed, with or without cause, by the holders of a majority of
the voting power of the shares then entitled to vote at an election of
directors; except that the CHX Holdings Board must consist of one
director who is the CEO of CHX Holdings.\86\ The Exchange believes that
this change will provide stockholders with recourse in the event the
best interest of the Exchange requires the removal of a director who
could not be removed for cause.
---------------------------------------------------------------------------

    \86\ See Section 2.16 of the proposed CHX Holdings Bylaws; see
also Article SEVENTH of the NSX Holdings Certificate.
---------------------------------------------------------------------------

    Incidentally, the Exchange proposes to delete paragraphs (b)
through (d) and (f) through (h) of Article SIXTH of the current CHX
Holdings Certificate, as the provisions are either obviated by the
proposed amendments reflected in the proposed CHX Holdings Bylaws or
obsolete.\87\ The Exchange proposes to maintain current Section (e) of
Article SIXTH of the current CHX Holdings Certificate, but to move the
provision to Section (b) of Article FIFTH of the proposed CHX Holdings
Certificate.\88\ The Exchange also proposes to delete reference to CHX
Holdings Director classes under Section 2.6 of the proposed CHX
Holdings Bylaws.
---------------------------------------------------------------------------

    \87\ See supra note 83.
    \88\ The CHX Holdings Director election requirements may also be
found under Section 4.9 of the proposed CHX Holdings Bylaws.
---------------------------------------------------------------------------

    The Exchange also proposes to amend current Section 2 of Article IV
(Special Meetings) of the current CHX Holdings Bylaws (i.e., Section
4.2 of the proposed CHX Holdings Bylaws) (1) to clarify that a special
meeting of the stockholders may be called ``at any time'' by the CEO or
the CHX Holdings Board and (2) to permit a special meeting of the
stockholders to be called ``upon written notice to the Corporation by
the stockholders holding one-third of the votes entitled to be cast''
(``CHX Holdings stockholder-called special meeting provision'').
Similar to the reasoning for the proposed amendment to Section 4.2 of
the CHX Bylaws, given that there will be 13 Upstream Owners of CHX
Holdings, the Exchange submits that the CHX Holdings stockholder-called
special meeting provision would facilitate the calling of special
meetings of the stockholders, which would promote stockholder
communication and transparency. The Exchange notes that while the
proposed CHX Holdings stockholder-called special meeting provision may
result in a special meeting of the stockholders being called by as few
as three Indirect Upstream Owners, any action by the stockholders
during a special meeting would be subject to the general quorum and
voting requirements of Section 4.9 of the proposed CHX Holdings Bylaws,
which requires, among other things, that the majority of the total
votes which all of the outstanding stock of CHX Holdings would be
entitled to cast at the meeting to be present, in person or by proxy,
to constitute a quorum.
CHX Holdings Current Ownership and Voting Limitations
    Section (b) of Article FIFTH of the current CHX Holdings
Certificate contains Ownership and Voting Limitations, which provide in
general that for so long as CHX Holdings controls the CHX: No
Person,\89\ either alone or together with its Related Persons,\90\ may
own, directly or

indirectly, of record or beneficially shares of stock of CHX Holdings
representing in the aggregate more than forty percent (40%) of the
then-outstanding votes entitled to be cast on any matter; (2) no
Person, either alone or together with its Related Persons, who is a
Participant may own, directly or indirectly, of record or beneficially
shares of stock of CHX Holdings representing in the aggregate more than
twenty percent (20%) of the then-outstanding votes entitled to be cast
on any matter; and (3) no Person, either alone or together with its
Related Persons, at any time may, directly, indirectly or pursuant to
any voting trust, agreement, plan or other arrangement, vote or cause
the voting of shares of the capital stock (whether such shares be
common stock or preferred stock) of CHX Holdings or give any consent or
proxy with respect to shares representing more than twenty percent
(20%) of the voting power of the then issued and outstanding capital
stock of CHX Holdings. Section (a) of Article FIFTH of the current CHX
Holdings Certificate contains obsolete stock transfer restrictions that
expired in 2004, which the Exchange proposes to delete in its entirety.
---------------------------------------------------------------------------

    \89\ Paragraph (a)(i) of Article FIFTH of the current CHX
Holdings Certificate defines ``Person'' as ``an individual,
partnership (general or limited), joint stock company, corporation,
limited liability company, trust or unincorporated organization, or
any governmental entity or agency or political subdivision
thereof.''
    \90\ Paragraph (a)(ii) of Article FIFTH of the current CHX
Holdings Certificate defines ``Related Persons'' as ``(A) with
respect to any Person, all ``affiliates'' and ``associates'' of such
Person (as such terms are defined in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended); (B) with respect to any Person
that holds a permit issued by the Chicago Stock Exchange, Inc. to
trade securities on the Chicago Stock Exchange (a ``Participant''),
any broker or dealer with which a Participant is associated; and (C)
any two or more Persons that have any agreement, arrangement or
understanding (whether or not in writing) to act together for the
purpose of acquiring, voting, holding or disposing of shares of the
capital stock of the Corporation.''
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    The current CHX Holdings Certificate contains provisions to address
violations of the current Ownership and Voting Limitations.
Specifically, Section (d) of Article FIFTH the current CHX Holdings
Certificate (Effect of Purported Transfers and Voting in Violation of
this Article) requires CHX Holdings to only record the transfer or
voting of shares that do not violate the Ownership and Voting
Limitations. That is, to the extent a purported transfer or voting of
shares exceeds the Ownership and Voting Limitations (``excess
shares''), such excess shares are not recorded nor effective.
Furthermore, Section (e) of Article FIFTH the current CHX Holdings
Certificate (Right to Redeem Shares Purportedly Transferred or Voted in
Violation of this Article) provides that if any stockholder purports to
transfer or vote shares in excess of the Ownership and Voting
Limitations, CHX Holdings shall have the right to redeem such excess
shares for a price per share equal to the par value of those shares.
    With respect to the ability of the Commission to enforce the Act as
it applies to the CHX after the Closing, the CHX will operate in the
same manner following the close of the Transaction in which it operates
today. Thus, the Commission will continue to have plenary regulatory
authority over the CHX, as is the case currently with the CHX being a
wholly-owned subsidiary of CHX Holdings. As described throughout this
proposed rule filing, the CHX is proposing a series of amendments to
its governing documents, as well as governing documents of NA Casin
Holdings that will create an ownership structure and provide the
Commission with appropriate oversight tools to ensure that the
Commission will have the ability to enforce the Exchange Act with
respect to the CHX and their respective directors, officers, employees,
and agents to the extent that they are involved in the activities of
the CHX.
Waiver of Current Ownership and Voting Limitations
    As described above, CHX Holdings will become a wholly-owned direct
subsidiary of NA Casin Holdings (``Proposed Share Ownership''). In
order to permit the Proposed Share Ownership in excess of the current
Ownership and Voting Limitations, paragraph (b)(iii)(B) and paragraph
(b)(iv) of Article FIFTH of the current CHX Holdings Certificate
requires that the CHX Holdings Board adopt a bylaw that waives the
current Ownership and Voting Limitations and make certain findings with
respect to the waiver of the current Ownership and Voting
Limitations.\91\
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    \91\ Current Paragraph (b)(iii)(B) of Article FIFTH of the
current CHX Holdings Certificate provides as follows: ``the
limitations in clauses (ii)(A) and (ii)(C) may be waived by the
Board of Directors of the Corporation pursuant to an amendment to
the bylaws adopted by the Board of Directors, if, in connection with
the adoption of such amendment, the Board of Directors adopts a
resolution stating that it is the determination of such Board that
such amendment will not impair the ability of the Chicago Stock
Exchange, Inc., to carry out its functions and responsibilities as
an `exchange' under the Act, and the rules under the Act; is
otherwise in the best interests of the Corporation and its
stockholders and the Chicago Stock Exchange, Inc.; will not impair
the ability of the United States Securities and Exchange Commission
to enforce the Act, and such amendment shall not be effective until
approved by said Commission. In making the determinations referred
to in the immediately preceding sentence, the Board of Directors may
impose on the Person in question and its Related Persons such
conditions and restrictions as it may in its sole discretion deem
necessary, appropriate or desirable in furtherance of the objectives
of the Act, and the rules under the Act, and the governance of the
Chicago Stock Exchange, Inc.'' Current Paragraph (b)(iv) of Article
FIFTH of the current CHX Holdings Certificate provides as follows:
``Notwithstanding clauses (iii)(A) and (iii)(B) above, in any case
where a Person, either alone or together with its Related Persons,
would own or vote more than the above percentage limitations upon
consummation of any proposed sale, assignment or transfer of the
Corporation's capital stock, such sale, assignment or transfer shall
not become effective until the Board of Directors of the Corporation
shall have determined, by resolution, that such Person and its
Related Persons are not subject to any applicable `statutory
disqualification' (within the meaning of Section 3(a)(39) of the
Securities Exchange Act of 1934, as amended).''
---------------------------------------------------------------------------

    Thus, pursuant to paragraph (b)(iii)(B) of Article FIFTH of the
current CHX Holdings Certificate, on February 3, 2016 and November 22,
2016, the CHX Holdings Board voted to approve Article XII, Section 12.1
of the proposed CHX Holdings Bylaws, which provides as follows:

    (a) For the sole purpose of permitting the merger contemplated
by an Agreement and Plan of Merger, dated February 4, 2016, among
the Corporation, Exchange Acquisition Corporation (``Merger Sub'')
and North America Casin Holdings, Inc. (``Parent''), under which the
Corporation will become a wholly-owned subsidiary of Parent, the
Board of Directors hereby waives pursuant to Article FIFTH,
paragraph (b)(iii)(B) of the certificate of incorporation of the
Corporation dated July 27, 2006, as amended (``2006 Certificate''):
(i) The restrictions on ownership of capital stock of the
Corporation described in Article FIFTH, paragraph (b)(ii)(A) of the
2006 Certificate (``Ownership Limits'') to permit Parent to possess
ownership in the Corporation in excess of the Ownership Limits
(``Proposed Share Ownership''); and (ii) the restrictions on voting
rights with respect to the capital stock of the Corporation as
described in Article FIFTH, paragraph (b)(ii)(C) of the 2006
Certificate (``Voting Limits'') to permit Parent to possess voting
rights in excess of the Voting Limits (``Proposed Voting Rights'').
    (b) In so waiving the applicable Ownership Limits and Voting
Limits, the Board of Directors has determined that: (i) The
acquisition of the Proposed Share Ownership by Parent will not
impair the ability of the Chicago Stock Exchange, Inc.
(``Exchange'') to carry out its functions and responsibilities as an
``exchange'' under the Exchange Act and the rules and regulations
promulgated thereunder, is otherwise in the best interests of the
Corporation, its stockholders and the Exchange, and will not impair
the ability of the Commission to enforce the Exchange Act and the
rules and regulations promulgated thereunder; (ii) the acquisition
or exercise of the Proposed Voting Rights by Parent will not impair
the ability of the Exchange to carry out its functions and
responsibilities as an ``exchange'' under the Exchange Act and the
rules and regulations promulgated thereunder, that it is otherwise
in the best interests of the Corporation, its stockholders and the
Exchange, and that it will not impair the ability of the Commission
to enforce the

Exchange Act and the rules and regulations promulgated thereunder;
and (iii) neither Parent, nor any of its Related Persons, is subject
to ``statutory disqualification'' within the meaning of Section
3(a)(39) of the Exchange Act.\92\
---------------------------------------------------------------------------

    \92\ 15 U.S.C. 78c(a)(39).

    Moreover, on November 22, 2016, the CHX Holdings Board approved the
Resolutions, herein attached as Exhibit 5H, which includes, among other
things, findings that (1) the acquisition of the Proposed Share
Ownership by Parent will not impair the ability of the Exchange to
carry out its functions and responsibilities as an ``exchange'' under
the Exchange Act and the rules and regulations promulgated thereunder,
is otherwise in the best interests of the Corporation, its stockholders
and the Exchange, and will not impair the ability of the Commission to
enforce the Exchange Act and the rules and regulations promulgated
thereunder; (2) the acquisition or exercise of the Proposed Voting
Rights by Parent will not impair the ability of the Exchange to carry
out its functions and responsibilities as an ``exchange'' under the
Exchange Act and the rules and regulations promulgated thereunder, that
it is otherwise in the best interests of the Corporation, its
stockholders and the Exchange, and that it will not impair the ability
of the Commission to enforce the Exchange Act and the rules and
regulations promulgated thereunder; (3) neither Parent, nor any of its
Related Persons, is subject to ``statutory disqualification'' within
the meaning of Section 3(a)(39) of the Exchange Act; and (4) execution
and delivery of the Merger Agreement by Parent constitutes notice of
Parent's intention to acquire the Proposed Share Ownership and the
Proposed Voting Rights, in writing not less than forty-five days before
the proposed ownership of such shares or the proposed exercise of such
voting rights.\93\
---------------------------------------------------------------------------

    \93\ The Merger Agreement was executed on February 4, 2016 and
the Resolutions were approved on November 22, 2016.
---------------------------------------------------------------------------

    The Exchange submits that SEC approval of the proposed rule change
and, in particular, Section 12.1 of the proposed CHX Holdings Bylaws,
will effectuate a waiver of the current Ownership and Voting
Limitations and will permit the Proposed Share Ownership and the
Proposed Voting Rights.
Proposed Ownership and Voting Limitations
    The Exchange further proposes to replace the Exchange's current
Ownership and Voting Limitations under Article FIFTH of the current CHX
Holdings Certificate with similar Ownership and Voting Limitations
(comprised of the ``Voting Limitation'' and the ``Concentration
Limitation'') utilized by NSX Holdings, except that the Exchange is not
requesting a temporary waiver of the Concentration Limitation as
provided under Section B of Article FOURTH of the NSX Holdings
Certificate. Given that the Indirect Upstream Owners will have a direct
ownership interest in NA Casin Holdings, NA Casin Holdings would also
adopt Ownership and Voting Limitations under the proposed NA Casin
Holdings Certificate identical to the those in the proposed CHX
Holdings Certificate,\94\ with additional language that provides that
for so long as the Corporation shall directly or indirectly control
CHX, the Corporation shall take reasonable steps necessary to cause CHX
Holdings, a Delaware corporation and a wholly-owned subsidiary of the
Corporation, to be in compliance with the Voting Limitation and the
Concentration Limitation, as such terms are defined in Article FOURTH
of the proposed CHX Holdings Certificate.\95\
---------------------------------------------------------------------------

    \94\ See Sections (4)-(15) of Article IX of the proposed NA
Casin Holdings Certificate.
    \95\ See Section (4) of Article IX of the proposed NA Casin
Holdings Certificate.
---------------------------------------------------------------------------

    Paragraph (c)(i) of Article FOURTH of the proposed CHX Holdings
Certificate provides as follows:

    Except as otherwise provided in this Section (c) of Article
FOURTH, no Person,\96\ either alone or with its Related Persons,\97\
shall be permitted at any time to own beneficially shares of stock
of the Corporation representing in the aggregate more than 40% of
the then outstanding votes entitled to be cast on any matter (the
``Concentration Limitation'').
---------------------------------------------------------------------------

    \96\ Section (b) of Article FOURTH of the proposed CHX Holdings
Certificate provides, in pertinent part, as follows: ```Person' as a
natural person, partnership (general or limited), corporation,
limited liability company, trust or unincorporated organization, or
a governmental entity or political subdivision thereof.''
    \97\ Supra note 17.

    Paragraph (c)(i)(A) of Article FOURTH of the proposed CHX Holdings
---------------------------------------------------------------------------
Certificate provides as follows:

    The Concentration Limitation shall apply unless and until: (x) a
Person (either alone or with its Related Persons) intending to
acquire such ownership shall have delivered to the Board of
Directors of the Corporation a notice in writing, not less than 45
days (or such shorter period as the Board of Directors of the
Corporation shall expressly consent to) prior to the acquisition of
any shares that would cause such Person (either alone or with its
Related Persons) to exceed the Concentration Limitation, of its
intention to acquire such ownership; (y) the Board of Directors of
the Corporation shall have resolved to expressly permit such
ownership; and (z) such resolution shall have been filed with the
Commission under Section 19(b) of the Exchange Act and shall have
become effective thereunder.

    Paragraph (c)(i)(B) of Article FOURTH of the proposed CHX Holdings
Certificate provides as follows:

    Subject to its fiduciary obligations pursuant to the Delaware
General Corporation Law, the Board of Directors of the Corporation
shall not adopt any resolution pursuant to paragraph (i)(A) of this
Section (c) of Article FOURTH unless the Board of Directors of the
Corporation shall have determined that: (x) such acquisition of
beneficial ownership by such Person, either alone or with its
Related Persons, will not impair any of the Corporation's or CHX's
ability to discharge its responsibilities under the Exchange Act and
the rules and regulations thereunder and is otherwise in the best
interests of the Corporation and its stockholders; (y) such
acquisition of beneficial ownership by such Person, either alone or
with its Related Persons, will not impair the Commission's ability
to enforce the Exchange Act; and (z) neither such Person nor any of
its Related Persons is subject to any statutory disqualification as
defined in Section 3(a)(39) of the Exchange Act. In making such
determinations, the Board of Directors of the Corporation may impose
such conditions and restrictions on such Person and its Related
Persons owning any shares of stock of the Corporation entitled to
vote on any matter as the Board of Directors of the Corporation may
in its sole discretion deem necessary, appropriate or desirable in
furtherance of the objectives of the Exchange Act and the governance
of the Corporation.

    Moreover, paragraph (c)(i)(C) of Article FOURTH of the proposed CHX
Holdings Certificate provides as follows:

    Unless the conditions specified in paragraph (i)(A) of this
Section (c) of Article FOURTH are met, if any Person, either alone
or with its Related Persons, at any time owns beneficially shares of
stock of the Corporation in excess of the Concentration Limitation,
the Corporation shall call from such Person and its Related Persons
that number of shares of stock of the Corporation entitled to vote
on any matter that exceeds the Concentration Limitation in
accordance with Section (e) of this Article FOURTH at a price equal
to the par value of such shares of stock.\98\

    \98\ Any stock called pursuant to Article FOURTH, paragraph
(c)(i)(C) of the proposed CHX Holdings Certificate shall be effected
by a resolution of the CHX Holdings Board that must be filed with
the Commission pursuant to Section 19(b) of the Exchange Act.
---------------------------------------------------------------------------

    The proposed CHX Holdings Certificate also provides for limitations
on ownership of shares by Participants of the Exchange. Paragraph
(c)(ii) of Article FOURTH of the proposed CHX Holdings Certificate
provides as follows:

    For so long as CHX remains a registered national securities
exchange under Section 6

of the Exchange Act, no Participant, either alone or with its
Related Persons, shall be permitted at any time to own beneficially
shares of stock of the Corporation representing in the aggregate
more than 20% of the then outstanding votes entitled to be cast on
any matter. If any Participant, either alone or with its Related
Persons, at any time owns beneficially shares of stock in excess of
such 20% limitation, the Corporation shall call from such
Participant and its Related Persons that number of shares of stock
of the Corporation entitled to vote on any matter that exceeds such
20% limitation in accordance with Section (e) of this Article FOURTH
at a price equal to the par value of such shares of stock.

    Paragraph (c)(iii) of Article FOURTH of the proposed CHX Holdings
Certificate provides as follows:

    The Corporation shall not register the purported transfer of any
shares of stock of the Corporation in violation of the restrictions
imposed by this Section (c) of Article FOURTH.

    Paragraph (c)(iv) of Article FOURTH of the proposed CHX Holdings
Certificate provides as follows:

    For purposes of this Section (c) of this Article FOURTH, no
Person shall be deemed to have any agreement, arrangement or
understanding to act together with respect to voting shares of stock
of the Corporation solely because such Person or any of such
Person's Related Persons has or shares the power to vote or direct
the voting of such shares of stock pursuant to a revocable proxy
given in response to a public proxy or consent solicitation
conducted pursuant to, and in accordance with, Regulation 14A
promulgated pursuant to the Exchange Act, except if such power (or
the arrangements relating thereto) is then reportable under Item 6
of Schedule 13D under the Exchange Act (or any similar provision of
a comparable or successor report).

    Section (d) of Article FOURTH (Ownership Limitation for
Disqualified Controlling Stockholders) of the proposed CHX Holdings
Certificate provides as follows:

    Notwithstanding any other provision of this Third Amended and
Restated Certificate of Incorporation, no Person that is subject to
any statutory disqualification as defined in Section 3(a)(39) of the
Exchange Act shall be permitted at any time to own beneficially,
either alone or with its Related Persons, shares of stock of the
Corporation representing in the aggregate more than 20% of the then
outstanding votes entitled to be cast on any matter (such Person, a
``Disqualified Controlling Stockholder''). If a Person becomes a
Disqualified Controlling Stockholder, the Corporation shall call
from such Person and its Related Persons that number of shares of
stock entitled to vote on any matter that exceeds such 20%
limitation in accordance with Section (e) of this Article FOURTH at
a price equal to the par value of such shares of stock.

    Section (e) of Article FOURTH of the proposed CHX Holdings
Certificate (Procedure for Calling Shares) provides as follows:

    In the event the Corporation shall call shares of stock (the
``Called Stock'') of the Corporation pursuant to Sections (c) or (d)
of this Article FOURTH, notice of such call shall be given by first
class mail, postage prepaid, mailed not less than 5 business nor
more than 60 calendar days prior to the call date, to the holder of
the Called Stock, at such holder's address as the same appears on
the stock register of the Corporation. Each such notice shall state:
(w) the call date; (x) the number of Called Stock to be called; (y)
the aggregate call price; and (z) the place or places where Called
Stock are to be surrendered for payment of the call price. Failure
to give notice aforesaid, or any defect therein, shall not affect
the validity of the call of Called Stock. From and after the call
date (unless default shall be made by the Corporation in providing
funds for the payment of the call price), shares of Called Stock,
which have been called as aforesaid shall be cancelled, shall no
longer be deemed to be outstanding, and all rights of the holder of
such Called Stock as a stockholder of the Corporation (except the
right to receive from the Corporation the call price against
delivery to the Corporation of evidence of ownership of such shares)
shall cease. Upon surrender in accordance with said notice of
evidence of ownership of Called Stock so called (properly assigned
for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such shares shall be called
by the Corporation at par value.

    Section (f) of Article FOURTH of the proposed CHX Holdings
Certificate (Right to Information; Determinations by the Board of
Directors) provides as follows:

    The Board of Directors of the Corporation shall have the right
to require any Person and its Related Persons reasonably believed
(v) to be subject to the Voting Limitation or the Nonvoting
Agreement Prohibition, (w) to own beneficially (within the meaning
of Rules 13d-3 and 13d-5 under the Exchange Act) shares of stock of
the Corporation entitled to vote on any matter in excess of the
Concentration Limitation, (x) to own beneficially (within the
meaning of Rules 13d-3 and 13d-5 under the Exchange Act) an
aggregate of 5% or more of the then outstanding shares of stock of
the Corporation entitled to vote on any matter, which ownership such
Person, either alone or with its Related Persons, has not reported
to the Corporation, (y) to be subject to the ownership limitation
set forth in paragraph (ii) of Section (c) of this Article FOURTH or
(z) to be a Disqualified Controlling Stockholder, to provide the
Corporation complete information as to all shares of stock of the
Corporation beneficially owned by such Person and its Related
Persons and any other factual matter relating to the applicability
or effect of this Article FOURTH as may reasonably be requested of
such Person and its Related Persons. Any constructions, applications
or determinations made by the Board of Directors of the Corporation
pursuant to this Article FOURTH in good faith and on the basis of
such information and assistance as was then reasonably available for
such purpose shall be conclusive and binding upon the Corporation
and its directors, officers and stockholders.

    With respect to voting limitations, paragraph (b)(i) of Article
FOURTH of the proposed CHX Holdings Certificate provides as follows:

    Notwithstanding any other provision of this Third Amended and
Restated Certificate of Incorporation, (x) no Person, either alone
or with its Related Persons, as of any record date for the
determination of stockholders entitled to vote on any matter, shall
be entitled to vote or cause the voting of shares of stock of the
Corporation, in person or by proxy or through any voting agreement
or other arrangement, to the extent such shares represent in the
aggregate more than 20% of the then outstanding votes entitled to be
cast on such matter (the ``Voting Limitation''), and if votes have
been cast, in person or by proxy or through any voting agreement or
other arrangement, by any Person, either alone or with its Related
Persons, in excess of the Voting Limitation, the Corporation shall
disregard such votes cast in excess of the Voting Limitation and (y)
no Person, either alone or with its Related Persons, may enter into
any agreement, plan or other an agreement relating to shares of
stock of the Corporation entitled to vote on any matter with any
other Person, either alone or with its Related Persons, under
circumstances which would result in shares of stock of the
Corporation that would be subject to such agreement, plan or other
arrangement not being voted on any matter, or the withholding of any
proxy relating thereto, where the effect of such agreement, plan or
other arrangement would be to enable any Person, either alone or
with its Related Persons, to vote, possess the right to vote or
cause the voting of shares of stock of the Corporation which would,
as a result thereof, represent in the aggregate more than 20% of the
then outstanding votes entitled to be cast on such matter (the
``Nonvoting Agreement Prohibition'').\99\

    \99\ Article FOURTH, paragraph (b)(i) of the proposed CHX
Holdings Certificate prohibits ``Nonvoting Agreements'' by or among
Persons and their Related Persons that would result in shares of
stock of CHX Holdings that would be subject to such agreement plan
or other arrangement not being voted on any matter, or the
withholding of any proxy relating those shares, where the effect of
such an agreement would be to enable any Person, either alone or
with its Related Persons, to vote, possess the right to vote or
cause the voting of shares of CHX Holdings which would, as a result
thereof, represent in the aggregate more than 20% of the then
outstanding votes entitled to be cast (the ``Nonvoting Agreement
Prohibition''). Any share owner seeking a waiver of the Nonvoting
Agreement Prohibition so as to be able to enter into such an
agreement would also be required to obtain express permission of the
CHX Holdings Board through a duly authorized written resolution that
is filed with and approved by the Commission under Section 19(b) of
the Exchange Act.

---------------------------------------------------------------------------

    Paragraph (b)(ii) of Article FOURTH of the proposed CHX Holdings
---------------------------------------------------------------------------
Certificate provides as follows:

    The Voting Limitation or the Nonvoting Agreement Prohibition, as
applicable, shall apply unless and until: (x) a Person (and its
Related Persons) owning any shares of stock of the Corporation
entitled to vote on such matter shall have delivered to the Board of
Directors of the Corporation a notice in writing, not less than 45
days (or such shorter period as the Board of Directors of the
Corporation shall expressly consent to) prior to any vote, of its
intention to cast more than 20% of the votes entitled to be cast on
such matter or to enter into an agreement, plan or other arrangement
that would violate the Nonvoting Agreement Prohibition, as
applicable; (y) the Board of Directors of the Corporation shall have
resolved to expressly permit such exercise or the entering into of
such agreement, plan or other arrangement, as applicable; and (z)
such resolution shall have been filed with the Securities and
Exchange Commission (the ``Commission'') under Section 19(b) of the
Exchange Act and shall have become effective thereunder.

    Paragraph (b)(iii) of Article FOURTH of the proposed CHX Holdings
Certificate provides as follows:

    Subject to its fiduciary obligations pursuant to the Delaware
General Corporation Law, the Board of Directors of the Corporation
shall not adopt any resolution pursuant to paragraph (b)(ii) of this
Article FOURTH unless the Board of Directors of the Corporation
shall have determined that: (v) the exercise of such voting rights
or the entering into of such agreement, plan or other arrangement,
as applicable, by such Person, either alone or with its Related
Persons, will not impair any of the Corporation's or the CHX's
ability to discharge its responsibilities under the Exchange Act and
the rules and regulations thereunder and is otherwise in the best
interests of the Corporation and its stockholders; (w) the exercise
of such voting rights or the entering into of such agreement, plan
or other arrangement, as applicable, by such Person, either alone or
with its Related Persons, will not impair the Commission's ability
to enforce the Exchange Act; (x) neither such Person nor any of its
Related Persons is subject to any statutory disqualification as
defined in Section 3(a)(39) of the Exchange Act; (y) in the case of
a resolution to approve the exercise of voting rights in excess of
the Voting Limitation, for so long as CHX remains a registered
national securities exchange as defined under Section 6 of the
Exchange Act, neither such Person nor any of its Related Persons is
a Participant (any such Person that is a Related Person of a
Participant shall hereinafter also be deemed to be a Participant for
purposes of this Third Amended and Restated Certificate of
Incorporation, as the context may require); and (z) in the case of a
resolution to approve any waiver of the Nonvoting Agreement
Prohibition, no such waiver may be approved with respect to any
agreement, plan or other arrangement to which a Participant is a
party that relates to shares of stock of the Corporation entitled to
vote on any matter. In making such determinations, the Board of
Directors of the Corporation may impose such conditions and
restrictions on such Person and its Related Persons owning any
shares of stock of the Corporation entitled to vote on any matter as
the Board of Directors of the Corporation may in its sole discretion
deem necessary, appropriate or desirable in furtherance of the
objectives of the Exchange Act and the governance of the
Corporation.

    Paragraph (b)(iv) of Article FOURTH of the proposed CHX Holdings
Certificate provides as follows:

    This Section (b) of Article FOURTH shall not apply to (x) any
solicitation of any revocable proxy from any stockholder of the
Corporation by or on behalf of the Corporation or by any officer or
director of the Corporation acting on behalf of the Corporation or
(y) any solicitation of any revocable proxy from any stockholder of
the Corporation by any other stockholder that is conducted pursuant
to, and in accordance with, Regulation 14A promulgated pursuant to
the Exchange Act.
Jurisdiction Over Individuals
    The Exchange proposes to harmonize provisions under the proposed
CHX Holdings Bylaws and the NA Casin Holdings Bylaws regarding
jurisdiction over individuals.
    Specifically, Section 3.5 of the proposed CHX Holdings Bylaws \100\
provides as follows:
---------------------------------------------------------------------------

    \100\ Section 3.6 of the proposed CHX Holdings Bylaws provides
that the Corporation shall take such action as is necessary to
ensure that the Corporation's officers, directors and employees
consent to the applicability of Sections 3.1, 3.2, 3.3, 3.4 and 3.5
with respect to activities related to the CHX.
---------------------------------------------------------------------------

     The Corporation and its officers, directors, employees and
agents, by virtue of their acceptance of such position, shall be deemed
to irrevocably submit to the jurisdiction of the United States federal
courts, Commission, and CHX,\101\ for the purposes of any suit, action
or proceeding pursuant to the United States federal securities laws,
and the rules or regulations thereunder, arising out of, or relating
to, the activities of CHX, and by virtue of their acceptance of any
such position, shall be deemed to waive, and agree not to assert by way
of motion, as a defense or otherwise in any such suit, action or
proceeding, any claims that it or they are not personally subject to
the jurisdiction of the United States federal courts, Commission or the
CHX, that the suit, action or proceeding is an inconvenient forum or
that the venue of the suit, action or proceeding is improper, or that
the subject matter of that suit, action or proceeding may not be
enforced in or by such courts or agency. The Corporation and its
officers, directors, employees and agents also agree that they will
maintain an agent, in the United States, for the service of process of
a claim arising out of, or relating to, the activities of CHX.
---------------------------------------------------------------------------

    \101\ Section 3.5 of the proposed CHX Holdings Bylaws is
virtually identical to Article III, Section 5 of the current CHX
Holdings Bylaws, except for amendments to replace ``Chicago Stock
Exchange, Inc.'' with the abbreviated ``CHX.''
---------------------------------------------------------------------------

    Similarly, Section 10.1.1 of the NA Casin Holdings Bylaws \102\
provides as follows:
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    \102\ Similar to Section 3.6 of the proposed CHX Holdings
Bylaws, Section 10.1.2 of the NA Casin Bylaws would provide that the
Corporation shall take reasonable steps necessary to cause its
officers, directors, and employees prior to accepting a position as
an officer, director, or employee, as applicable, of the Corporation
to consent to the applicability to them of Sections 1, 3, 16 and 17
of Article IX of the Certificate of Incorporation and Section 10.1.1
hereof to the extent that such officers, directors, and employees
are involved in the activities of CHX. See supra note 100.
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     The Corporation and its officers, directors, employees and
agents, by virtue of their acceptance of such position, shall be deemed
to irrevocably submit to the jurisdiction of the United States federal
courts, United States Securities and Exchange Commission
(``Commission''), and the Chicago Stock Exchange, Inc. (``CHX''), for
the purposes of any suit, action or proceeding pursuant to the United
States federal securities laws, and the rules or regulations
thereunder, arising out of, or relating to, the activities of CHX, and
by virtue of their acceptance of any such position, shall be deemed to
waive, and agree not to assert by way of motion, as a defense or
otherwise in any such suit, action or proceeding, any claims that it or
they are not personally subject to the jurisdiction of the United
States federal courts, Commission or the CHX, that the suit, action or
proceeding is an inconvenient forum or that the venue of the suit,
action or proceeding is improper, or that the subject matter of that
suit, action or proceeding may not be enforced in or by such courts or
agency. The Corporation and its officers, directors, employees and
agents also agree that they will maintain an agent, in the United
States, for the service of process of a claim arising out of, or
relating to, the activities of CHX.
Access to Books and Records
    The Exchange proposes to harmonize provisions under the CHX
Holdings Bylaws and the NA Casin Holdings Certificate regarding access
to certain books and records so as to facilitate access to such books
and records of the Indirect Upstream Owners by the Commission and CHX.

    Specifically, the proposed CHX Holdings Bylaws includes the
following provisions:
     Section 3.2 \103\ would provide that all confidential
information pertaining to the self-regulatory function of CHX
(including, but not limited to, confidential information regarding
disciplinary matters, trading data, trading practices and audit
information) contained in the books and records of CHX that shall come
into the possession of the Corporation shall, to the fullest extent
permitted by law: (i) Not be made available to any Person (other than
as provided in the next sentence) other than to those officers,
directors, employees and agents of the Corporation that have a
reasonable need to know the contents thereof; (ii) be retained in
confidence by the Corporation and the officers, directors, employees
and agents of the Corporation; and (iii) not be used for any non-
regulatory purposes. Nothing in these bylaws shall be interpreted as to
limit or impede: (a) The rights of the Commission or CHX to access and
examine such confidential information pursuant to the federal
securities laws and the rules and regulations promulgated thereunder;
or (b) the ability of any officers, directors, employees or agents of
the Corporation to disclose such confidential information to the
Commission or CHX.
---------------------------------------------------------------------------

    \103\ See supra note 100.
---------------------------------------------------------------------------

     Section 3.3 \104\ would provide that for so long as the
Corporation shall control, directly or indirectly, CHX, the books,
records, premises, officers, directors and employees of the Corporation
shall be deemed to be the books, records, premises, officers, directors
and employees of CHX for purposes of and subject to oversight pursuant
to the Exchange Act, but only to the extent that such books and records
are related to, or such officers, directors and employees are involved
in, the activities of CHX. The Corporation's books and records relating
to the activities of CHX shall be subject at all times to inspection
and copying by the Commission and CHX. The Corporation's books and
records related to the activities of CHX shall be maintained within the
United States.
---------------------------------------------------------------------------

    \104\ See id.
---------------------------------------------------------------------------

     Section 3.7 provides that for so long as a stockholder
shall maintain a direct or indirect equity interest in the Chicago
Stock Exchange, Inc.: (a) The books, records, officers, directors (or
equivalent) and employees of the stockholder shall be deemed to be the
books, records, officers, directors and employees of Chicago Stock
Exchange, Inc. for purposes of and subject to oversight pursuant to the
Exchange Act to the extent that such books and records are related to,
or such officers, directors (or equivalent) and employees are involved
in, the activities of Chicago Stock Exchange, Inc.; (b) the
stockholder's books and records related to the activities of Chicago
Stock Exchange, Inc. shall at all times be made available for
inspection and copying by the Commission and Chicago Stock Exchange,
Inc.; and (c) the stockholder's books and records related to the
activities of Chicago Stock Exchange, Inc. shall be maintained within
the United States.
    Similarly, the NA Casin Holdings Certificate includes the following
provisions:
     Similar to Section 3.2 of the proposed CHX Holdings
Bylaws, Section (16) of Article IX would provide that all confidential
information pertaining to the self-regulatory function of CHX
(including, but not limited to, confidential information regarding
disciplinary matters, trading data, trading practices and audit
information) contained in the books and records of CHX that shall come
into the possession of the Corporation shall, to the fullest extent
permitted by law: (i) Not be made available to any Person (other than
as provided in the next sentence) other than to those officers,
directors, employees and agents of the Corporation that have a
reasonable need to know the contents thereof; (ii) be retained in
confidence by the Corporation and the officers, directors, employees
and agents of the Corporation; and (iii) not be used for any non-
regulatory purposes. Nothing in this Amended and Restated Certificate
of Incorporation shall be interpreted as to limit or impede: (A) The
rights of the Commission or CHX to access and examine such confidential
information pursuant to the federal securities laws and the rules and
regulations promulgated thereunder; or (B) the ability of any officers,
directors, employees or agents of the Corporation to disclose such
confidential information to the Commission or CHX.
     Similar to Section 3.3 of the proposed CHX Holdings
Bylaws, Section (17) of Article IX would provide that for so long as
the Corporation shall control, directly or indirectly, CHX, the books,
records, premises, officers, directors and employees of the Corporation
shall be deemed to be the books, records, premises, officers, directors
and employees of CHX for purposes of and subject to oversight pursuant
to the Exchange Act, but only to the extent that such books and records
are related to, or such officers, directors and employees are involved
in, the activities of CHX. The Corporation's books and records relating
to the activities of CHX shall be subject at all times to inspection
and copying by the Commission and CHX. The Corporation's books and
records related to the activities of CHX shall be maintained within the
United States.
     Similar to Section 3.7 of the proposed CHX Holdings
Bylaws, Section (18) of Article IX would provide that for so long as a
stockholder shall maintain a direct or indirect equity interest in CHX:
(a) The books, records, officers, directors (or equivalent) and
employees of the stockholder shall be deemed to be the books, records,
officers, directors and employees of CHX for purposes of and subject to
oversight pursuant to the Exchange Act to the extent that such books
and records are related to, or such officers, directors (or equivalent)
and employees are involved in, the activities of CHX; (b) the
stockholder's books and records related to the activities of CHX shall
at all times be made available for inspection and copying by the
Commission and CHX; and (c) the stockholder's books and records related
to the activities of CHX shall be maintained within the United States.
Additional Matters
    The Exchange proposes to harmonize provisions under the CHX
Holdings Bylaws and the NA Casin Holdings Certificate regarding the
preservation of the independence of the self-regulatory function of the
CHX, directors' consideration of the effect of CHX Holdings' actions on
the CHX's ability to carry out its responsibilities under the Exchange
Act and cooperation with the Commission and the CHX.
    Specifically, the proposed CHX Holdings Bylaws includes the
following provisions:
     Section 3.1 provides that for so long as the Corporation
shall control Chicago Stock Exchange, Inc. (``CHX''), the Corporation
and its Board of Directors, officers, employees and agents shall give
due regard to the preservation of the independence of the self-
regulatory function of the CHX and to its obligations to investors and
the general public and shall not take any actions which would interfere
with the effectuation of any decisions by the Board of Directors of the
CHX relating to its regulatory functions (including enforcement and
disciplinary matters) or the structure of the market which it regulates
or which would interfere with the ability of the CHX to carry out its
responsibilities under the Securities

Exchange Act of 1934, as amended (the ``Exchange Act''). The
Corporation's books and records related to the activities of CHX shall
be maintained within the United States.
     Section 3.4 provides that the Corporation and its
officers, directors, employees and agents, by virtue of their
acceptance of such position, shall comply with the federal securities
laws and rules and regulations thereunder and shall: (a) Cooperate (i)
with the Commission, and (ii) with CHX pursuant to, and to the extent
of, CHX's regulatory authority; and (b) take reasonable steps necessary
to cause its agents to cooperate (i) with the Commission, and (ii) with
CHX pursuant to, and to the extent of, CHX's regulatory authority with
respect to such agents' activities related to CHX.
    Similarly, the NA Casin Holdings Certificate includes the following
provisions:
     Similar to Section 3.1 of the proposed CHX Holdings
Bylaws, Section (3) of Article IX would provide that for so long as the
Corporation shall control CHX, the Corporation and its Board of
Directors, officers, employees and agents shall give due regard to the
preservation of the independence of the self-regulatory function of the
CHX and to its obligations to investors and the general public and
shall not take any actions which would interfere with the effectuation
of any decisions by the Board of Directors of the CHX relating to its
regulatory functions (including enforcement and disciplinary matters)
or the structure of the market which it regulates or which would
interfere with the ability of the CHX to carry out its responsibilities
under the Securities Exchange Act of 1934, as amended. The
Corporation's books and records related to the activities of CHX shall
be maintained within the United States.
     Similar to Section 3.4 of the proposed CHX Holdings
Bylaws, Section (2) of Article IX would provide that the Corporation
and its officers, directors, employees and agents, by virtue of their
acceptance of such position, shall comply with the federal securities
laws and rules and regulations thereunder and shall: (a) Cooperate (i)
with the United States Securities and Exchange Commission (the
``Commission''), and (ii) with the Chicago Stock Exchange, Inc. a
Delaware corporation and an indirect wholly-owned subsidiary of the
Corporation (``CHX''), pursuant to, and to the extent of, CHX's
regulatory authority; and (b) take reasonable steps necessary to cause
its agents to cooperate (i) with the Commission, and (ii) with CHX
pursuant to, and to the extent of, CHX's regulatory authority with
respect to such agents' activities related to CHX.
    Moreover, so as to ensure that a new NA Casin Holdings board is
elected by the Indirect Upstream Owners as soon as practicable after
the Closing and to facilitate the ability of NA Casin Holdings to
maintain board members that are experienced with the operation of the
Exchange, NA Casin Holdings would adopt the following provision in the
NA Casin Holdings Certificate:
     Section (4) of Article V of the NA Casin Holdings
Certificate would provide that the directors shall hold office until
their successors are elected and qualified, and prior to the election
of directors described in paragraph (5) below, any director may be
removed with or without cause at any time by a vote of the
recordholders of a majority of the Shares then entitled to vote, or by
written consent of the recordholders of a majority of the Shares
entitled to vote at a meeting of the stockholders.
     Section (5) of Article V of the NA Casin Holdings
Certificate would provide that within 30 days after the consummation of
the merger contemplated by the Agreement and Plan of Merger dated as of
February 4, 2016 among CHX Holdings, Inc., the Corporation and Exchange
Acquisition Corp. (the ``Merger Agreement'') the Corporation shall
convene a special meeting of its stockholders for the purpose of
electing a new Board of Directors. From and after such special meeting,
the Board shall be and is divided into three classes, as nearly equal
in number as possible, designated: Class I, Class II and Class III. In
case of any increase or decrease, from time to time, in the number of
directors, the number of directors in each class shall be apportioned
as nearly equal as possible. No decrease in the number of directors
shall shorten the term of any incumbent director.
     Section (6) of Article V of the NA Casin Holdings
Certificate would provide that each director shall serve for a term
ending on the date of the third annual meeting following the meeting at
which such director was elected; provided, that each director initially
appointed to Class I shall serve for an initial term expiring at the
corporation's annual meeting of stockholders held in 2017; each
director initially appointed to Class II shall serve for an initial
term expiring at the corporation's annual meeting of stockholders held
in 2018; and each director initially appointed to Class III shall serve
for an initial term expiring at the corporation's annual meeting of
stockholders held in 2019; provided further, that the term of each
director shall continue until the election and qualification of a
successor and be subject to such director's earlier death, resignation
or removal.
    The class board structure of Article V of the NA Casin Holdings
Certificate would ensure overlap of board member terms, which would
provide continuity and stability as to board composition and, thereby,
facilitate the ability of the NA Casin Holdings board to meet its
obligations under Article IX of the NA Casin Holdings Certificate.
Effecting Amendments to CHX Holdings and NA Casin Governing Documents
    The Exchange proposes to harmonize provisions under the CHX
Holdings Bylaws, the NA Casin Holdings Certificate and the NA Casin
Holdings Bylaws regarding the effectuation of amendments to those
documents.
    Specifically, Article VIII of the proposed CHX Holdings Bylaws
provides as follows:
     These bylaws may be amended or repealed, or new bylaws may
be adopted, by the Board of Directors. These bylaws may also be amended
or repealed, or new bylaws may be adopted, by action taken by the
stockholders of the Corporation. For so long as this Corporation shall
control, directly or indirectly, CHX, before any amendment to or repeal
of any provision of the bylaws of this Corporation shall be effective,
those changes shall be submitted to the Board of Directors of CHX and
if that Board shall determine that the same must be filed with or filed
with and approved by the Commission before the changes may be
effective, under Section 19 of the Exchange Act and the rules
promulgated under that Exchange Act by the Commission or otherwise,
then the proposed changes to the bylaws of this Corporation shall not
be effective until filed with or filed with and approved by the
Commission, as the case may be.
    Also, Article ELEVENTH of the proposed CHX Holdings Certificate
provides as follows:
     The Corporation reserves the right to amend this
certificate of incorporation, and to change or repeal any provision of
the certificate of incorporation, in the manner prescribed at the time
by statute, and all rights conferred upon stockholders by such
certificate of incorporation are granted subject to this reservation.
For so long as this Corporation shall control, directly or indirectly,
Chicago Stock Exchange, Inc., before any amendment to or repeal of any
provision of this certificate of incorporation shall be effective,
those changes shall be submitted to the Board of Directors of

Chicago Stock Exchange, Inc. and if that Board shall determine that the
same must be filed with or filed with and approved by the Commission
before the changes may be effective, under Section 19 of the Act and
the rules promulgated under that Act by the Commission or otherwise,
then the proposed changes to the certificate of incorporation of this
Corporation shall not be effective until filed with or filed with and
approved by the Commission, as the case may be.
    Similarly, NA Casin Holdings would adopt the following provisions
in its governing documents to require the consent of the CHX's board of
directors in amending or repealing any provisions of NA Casin Holdings'
governing documents:
     Section 11.1 of the NA Casin Holdings Bylaws would
provide, in pertinent part, that for so long as this Corporation shall
control, directly or indirectly, CHX, before any amendment to or repeal
of any provision of these Bylaws shall be effective, the same shall be
submitted to the board of directors of CHX and if said board shall
determine that the same must be filed with, or filed with and approved
by, the Commission before the same may be effective, under Section 19
of the Securities and Exchange Act of 1934 and the rules promulgated
thereunder, then the same shall not be effective until filed with, or
filed with and approved by, the Commission, as the case may be.
     Article X of the NA Casin Holdings Certificate would
provide that for so long as this Corporation shall control, directly or
indirectly, CHX before any amendment to or repeal of any provision of
this Certificate of Incorporation shall be effective, the same shall be
submitted to the board of directors of CHX and if said board shall
determine that the same must be filed with, or filed with and approved
by, the Commission before the same may be effective, under Section 19
of the Exchange Act and the rules promulgated thereunder, then the same
shall not be effective until filed with, or filed with and approved by,
the Commission, as the case may be.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act in general,\105\ and Section 6(b)(1) in
particular.\106\ Specifically, the Exchange believes that the proposed
non-substantive amendments to the governing documents of CHX and CHX
Holdings and the CHX Rules clarify the history and organization of
those documents and eliminates redundant provisions, which include the
following key changes described in greater detail above:
---------------------------------------------------------------------------

    \105\ 15 U.S.C. 78f(b).
    \106\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------

     Omitting provisions from the proposed CHX Holdings
Certificate regarding board composition requirements and election/
vacancy procedures, as they are fully-described under Article II of the
proposed CHX Holdings Bylaws.
     Omitting provisions from the proposed CHX Certificate
regarding board composition requirements and election/vacancy
procedures, as they are fully-described under Article III of the
proposed CHX Bylaws.
     Moving provisions under Article 2, Rule 1 of the current
CHX Rules regarding board committees and their respective composition
requirements to Article V of the proposed CHX Bylaws.
    Accordingly, the Exchange believes that the proposed rule change
would further enable the Exchange to be so organized as to have the
capacity to be able to carry out the purposes of the Act and to comply,
and to enforce compliance by its Participants and persons associated
with its Participants, with the provisions of the Act, the rules and
regulations thereunder, and the rules of the Exchange, in furtherance
of the objectives of Section 6(b)(1) of the Act.
    Moreover, the Exchange believes that the proposed rule change
furthers the objectives of Section 6(b)(5) \107\ in that it is designed
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, to remove impediments and perfect the
mechanisms of a free and open market, and, in general, to protect
investors and the public interest. Specifically, the Exchange submits
that the CHX Rules, the relevant governing documents of CHX and its
upstream affiliates, CHX Holdings and NA Casin Holdings, the NACH
Stockholders' Agreement, the Saliba Put Agreement and the Raptor Put