[Federal Register Volume 69, Number 144 (Wednesday, July 28, 2004)]
[Notices]
[Pages 45091-45102]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17113]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50057; File No. SR-Amex-2004-50]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the American Stock Exchange LLC Relating to the NASD's Sale 
of Its Interest in the American Stock Exchange LLC to the Amex 
Membership Corporation

July 22, 2004.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934,\1\ as amended (the ``Act''), and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on June 30, 2004, the American Stock Exchange LLC 
(``Amex'' or the ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared by the 
Exchange. On July 15, 2004, the Exchange filed Amendment No. 1 to the 
proposal.\3\ On July 21, 2004, the Exchange filed Amendment No. 2 to 
the proposal.\4\ 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.
    \3\ See letter from Michael J. Ryan, Jr., Executive Vice 
President and General Counsel to Nancy Sanow, Assistant Director, 
Division of Market Regulation (``Division''), Commission, dated July 
13, 2004 (``Amendment No. 1''). Amendment No. 1 replaced Amex's 
original filing in its entirety.
    \4\ See letter from Michael J. Ryan, Jr., Executive Vice 
President and General Counsel to Nancy Sanow, Assistant Director, 
Division, Commission, dated July 20, 2004 (``Amendment No. 2''). 
Amendment No. 2 corrected formatting errors in the Amex 
Constitution, the Amended and Restated Exchange Limited Liability 
Company Agreement, the Second Restated Certificate of Incorporation 
of The Amex Membership Corporation, and the Amended and Restated By-
Laws of The Amex Membership Corporation that were filed with 
Amendment No. 1; no substantive changes to these documents were made 
in Amendment No. 2.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing with the Commission proposed changes to its 
Constitution and certain other organizational documents in connection 
with a proposed transaction (``Transaction'') under which The Amex 
Membership Corporation (``MC'') will become the sole owner of the 
Exchange through the acquisition of 100% of the Class B Participation 
Interest in the Exchange from New NASD Holdings, Inc. (``NAHO''), a 
wholly owned subsidiary of the National Association of Securities 
Dealers, Inc. (``NASD''). The proposed changes to Amex's Constitution, 
together with the Amended and Restated Exchange Limited Liability 
Company Agreement, the Second Restated Certificate of Incorporation of 
MC and the Amended and Restated By-Laws of MC are collectively referred 
to herein as the ``proposed rule change.'' The text of the proposed 
rule change is available for viewing on the Commission's Web site, 
www.sec.gov/rules/sro.shtml, and at the Exchange and the Commission.\5\
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    \5\ The Commission notes that the texts of these documents that 
appear on the Commission's Web site are the texts that were filed as 
part of Amendment No. 2.
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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 Exchange 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 these 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 aspects of such 
statements.

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

1. Purpose
    The purpose of the proposed rule change is to implement changes to 
the current Constitution of the Exchange that will become effective at 
the time of the closing of the Transaction, as well as changes to the 
current Exchange Limited Liability Company Agreement, MC Certificate of 
Incorporation and MC By-laws. On February 7, 2004, the Board of 
Directors of MC, which corporation is currently the owner of 100% of 
the Class A Participation Interest in the Exchange, approved the terms 
of an agreement (the ``Transaction Agreement'') pursuant to which it, 
through a newly formed, wholly owned subsidiary of MC (``MC Acquisition 
Sub''), will acquire 100% of the Class B Participation Interest in the 
Exchange from NAHO, a wholly owned subsidiary of the NASD, giving MC 
sole ownership of the Exchange.\6\ On February 26, 2004, the NASD Board 
of Governors unanimously approved the Transaction. On February 27, 
2004, the Special Committee of the Board of Governors of the Exchange 
\7\ unanimously determined that the Transaction was in the best 
interests of the Exchange and, subject to execution of a regulatory 
services agreement, recommended that the Board of Governors of the 
Exchange (each member of such Board, a ``Governor'') consider and 
approve the Transaction. In connection with the Exchange member 
approval of the Transaction, MC sent to all the Exchange regular and 
options principal members (referred to collectively as ``Members'') and 
seat owners an Information Memorandum dated February 17, 2004, which 
was supplemented on March 2 and March 12, 2004, respectively, 
describing the Transaction in detail. Attached as exhibits to the 
Information Memorandum were the Transaction Agreement (including 
exhibits thereto), the amended Exchange Constitution, the Exchange 
Amended and Restated Limited Liability Company Agreement (the ``Amended 
Exchange LLC Agreement'') the Second Restated MC Certificate of 
Incorporation, and the Amended and Restated By-Laws of MC (the 
``Amended MC By-Laws'').\8\ At a Special Meeting of Members held on 
March 18, 2004, the Members approved the Transaction. On March 31, 
2004, the Board of the Exchange approved the

[[Page 45092]]

Transaction \9\, and on April 30, 2004, the regulatory services 
agreement was executed by the Exchange and the NASD. On June 24, 2004, 
the Board of MC approved the final forms of the Exchange and MC 
governance documents, including the Exchange Constitution, that are 
filed herein.\10\ It is expected that in July 2004 the Board of the 
Exchange will approve the final forms of the Exchange and MC governance 
documents, including the Exchange Constitution. The Exchange states 
that, for the purpose of this filing, no further action by the Exchange 
Board or membership is required to be taken. The Exchange represents 
that no other changes to the rules of the Exchange are required to be 
made as a result of the Transaction.
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    \6\ Ownership interests in American Stock Exchange LLC currently 
consist of a Class A Participation Interest held by MC and a Class B 
Participation Interest held by NAHO.
    \7\ In connection with the Transaction, the Exchange Board of 
Governors, recognizing that certain of its members had actual or 
possible conflicts of interest in connection with the Transaction by 
virtue of their service on the NASD Board of Governors and the MC 
Board of Directors, recommended that the Special Committee 
consisting solely of Governors who were not members of the NASD 
Board of Governors or the MC Board of Directors be established. On 
December 11, 2003, the Exchange Board of Governors established the 
Special Committee to consider whether the Transaction is in the best 
interests of the Exchange and to make recommendations to the 
Exchange Board of Governors concerning actions to be taken by such 
Board in connection with the Transaction.
    \8\ Additional changes have been made to these governance 
documents since the distribution of the Information Memorandum and 
Supplements thereto to the Members and seat owners prior to the 
Special Meeting of Members on March 18, 2004. The Information 
Memorandum advised Members that the amendments to these governance 
documents required SEC approval and were subject to ``such other 
changes that may be requested by the SEC that are reasonably 
acceptable to each of the Exchange, NASD and [MC].''
    \9\ At the March 31 meeting, the Exchange Board also approved 
the then-current forms of Exchange and MC governance documents.
    \10\ Telephone conversation between Mark Underberg, Esq., 
Counsel to MC, Paul, Weiss, Rifkind, Wharton & Garrison LLP, and 
Heather Seidel, Attorney Fellow, and Rebekah Liu, Special Counsel, 
Division, Commission, on July 19, 2004.
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    The following is an overview of the key terms of the Transaction.
    A. Acquisition by MC of the Class B Participation Interest. As 
stated previously, MC will, through MC Acquisition Sub, acquire 100% of 
the Class B Participation Interest in the Exchange from NAHO, a NASD 
subsidiary. As a result, upon consummation of the Transaction, MC will 
beneficially own 100% of the equity of the Exchange. MC Acquisition Sub 
will be formed for the sole purpose of acquiring and holding the Class 
B Participation Interest; it is being used to avoid a technical 
liquidation of the Exchange as a result of the closing of the 
Transaction. Following the consummation of the Transaction, the Class B 
Participation Interest will represent a non-voting interest in the 
Exchange; the Class A Participation Interest, which will continue to be 
held directly by MC, will represent the sole voting interest in the 
Exchange. In addition, all rights to trade through the facilities of 
the Exchange will continue to be owned by MC.
    B. Restructuring of Existing Debt. At the closing of the 
Transaction, NASD and the Exchange will restructure an existing $50 
million loan owed by the Exchange to NASD. Under the terms of the 
arrangement, among other things, the Exchange will have the ability to 
satisfy all obligations under this loan in full for $25 million plus 
accrued interest if it is repaid within the first year of the closing 
of the Transaction.
    C. Extension of a Revolving Credit Facility. At the closing of the 
Transaction, NASD and the Exchange will enter into a Revolving Credit 
Facility, pursuant to which the Exchange will have the ability to 
borrow from NASD up to a maximum, at any one time, of $25 million.
    D. Unwinding of the 1998 Transaction. Subject to the terms of the 
Transaction Agreement, the agreements relating to the 1998 transaction 
whereby NASD acquired the Class B Participation Interest in the 
Exchange (the ``1998 Transaction''), including the 1998 Transaction 
Agreement and the 1998 Technology Transfer Agreement, will be 
terminated and the 1998 Limited Liability Company Agreement of the 
Exchange will be amended. As the Transaction effectively results in an 
unwinding of the 1998 Transaction, NASD, the Exchange, and MC will 
enter into certain mutual releases of obligations, including those 
arising under the 1998 Agreements and otherwise related to the 1998 
Transaction.
    E. Effect of the Transaction on Members. The existing rights and 
obligations of the Members regarding trading through the Exchange will 
not be affected by the Transaction. Trading rights will continue to be 
owned by MC and represent the right to trade through the facilities of 
the Exchange. In connection with the termination of the 1998 
Transaction Agreement, the Members will no longer have the special 
rights to approve material market changes to the Exchange's equity and 
options businesses that were put in place at the time NASD took control 
of the Exchange. However, no amendment to the Exchange Constitution 
that would result in a material change in the market structure or 
operations of the Exchange shall be made without first obtaining the 
consent from the Board of Directors of MC. In addition, Members will 
have the ability to elect the Exchange Board of Governors and the MC 
Board of Directors.
    F. Seat Fund Distribution. NAHO will pay in full the remaining 
commitment under the 1998 Seat Fund Program to the owners of regular 
and options principal memberships, which is an aggregate of 
approximately $17.144 million (including accrued interest) as of 
January 31, 2004. Such amount will be distributed pro rata to the 
owners of regular and options principal memberships, with each regular 
and options principal membership receiving an equal amount of 
approximately $20,483, plus additional accrued interest on such amount 
at an annual rate of 5% from January 31, 2004 through the closing of 
the Transaction.
    G. Institution of New Governance Structures for Both the Exchange 
and MC. The Exchange Constitution and the 1998 Limited Liability 
Company Agreement of the Exchange and the Certificate of Incorporation 
and By-Laws of MC will be amended to, among other things, institute new 
governance structures for both the Exchange and MC. The proposed 
governance structure for the Exchange provides for a Board of Governors 
selected by its Members, who will also have the opportunity to vote on 
a ``pass-through'' basis on certain significant matters involving the 
Exchange, including the sale, issuance, transfer or other disposition 
of any equity security of the Exchange or of any notes or debt 
securities of the Exchange containing equity features, or the issuance 
of any new trading rights by the Exchange. The new governance 
provisions also will provide that the Exchange Board of Governors will 
be largely independent and will have board committees composed 
primarily of independent Governors with substantial authority over 
compensation, audit, regulatory and corporate governance matters, as 
well as the nomination of Governors to serve on the Exchange Board of 
Governors. The proposed changes are intended to reflect ``best 
practices'' in the rapidly evolving corporate governance area, while at 
the same time ensuring fair representation of various constituencies on 
the Exchange Board of Governors. The corporate governance structure of 
MC also will change in that its Board of Directors will be elected by 
the Members of MC and will consist of five persons who do not 
necessarily serve on the Exchange Board of Governors.
    A summary of the new Exchange governance structure, as provided in 
the Exchange Constitution, the Amended and Restated Exchange Limited 
Liability Agreement, the Second Restated MC Certificate of 
Incorporation and the Amended MC By-Laws, is set forth below. The text 
of the proposed rule change is available for viewing on the 
Commission's Web site, www.sec.gov/rules/sro.shtml, and at Amex and the 
Commission.
    (i) The Exchange Board of Governors. The Exchange Board of 
Governors currently consists of eighteen members.\11\ Within six months 
after the closing of the Transaction, the Exchange will transition from 
an eighteen member Board of Governors to a new Board consisting of 
fifteen Governors: (a) Nine of the Governors will be ``Independent

[[Page 45093]]

Governors'' and (b) six of the Governors will be ``Industry Governors'' 
as each is defined below. This six-month transition period will 
facilitate a phase-in of the new governance structure of the Exchange. 
Following the closing of the Transaction, the Board of Governors of the 
Exchange will form the initial Amex Nominating and Corporate Governance 
Committee, which will select nominees for Governor for the first 
election during the six-month transition period. By the end of the six-
month transition period, the Members will have elected a new Board of 
Governors of the Exchange from and among these nominees or any other 
candidates nominated by the Members through petition.
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    \11\ It is expected that at least one Governor will resign from 
the Exchange Board of Governors upon the closing of the Transaction.
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    At the first election of the Exchange Board of Governors during the 
six-month transition period, eight of the fifteen Governors will be 
elected to an initial two-year term and the remaining seven Governors 
will be elected to an initial one-year term.\12\ Thereafter, there will 
be an annual meeting for the election of Governors to succeed those 
Governors whose terms have expired. All Governors elected at the annual 
meeting for the election of Governors will serve two-year terms and 
will hold office until their successors are elected. No Governor (other 
than the Management Governor, as defined below) who has served four 
consecutive terms as a Governor will be eligible for election as a 
Governor except after an interval of two years; provided, however, that 
service on the Exchange Board of Governors prior to January 1, 1999 
will not be taken into account for these purposes.\13\
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    \12\ The slate of initial eight Governors serving two-year terms 
and the initial Governors serving one-year terms shall consist of 
Independent Governors and Industry Governors in approximately equal 
proportions.
    \13\ See Article II, Section 1 of the Exchange Constitution.
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    Each Governor will, in exercising his or her powers and performing 
his or her duties, comply with the Federal securities laws and the 
rules and regulations thereunder and cooperate with the Commission 
pursuant to its regulatory authority and take into consideration the 
self-regulatory function of the Exchange and his or her obligations 
under the Act and the rules thereunder, including, without limitation, 
Section 6(b) \14\ of the Act.\15\
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    \14\ 15 U.S.C. 78f(b).
    \15\ See Article II, Section 3 of the Exchange Constitution.
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    The nine Independent Governors will not be officers or employees 
of, and will have no material business relationship with, the Exchange 
and the holders of the Class A and Class B Participation Interests, 
will not be directors of the holders of the Class A or Class B 
Participation Interest, and will not be (i) Members, lessors or lessees 
of memberships, (ii) employed by, or affiliated or associated with, any 
entity that (x) is a Member, (y) otherwise has trading rights or 
privileges on the Exchange or (z) is a broker or dealer, or (iii) 
directors, officers or employees of an issuer of securities that are 
listed on the Exchange. The Independent Governors will meet such 
additional criteria for independence or otherwise, as are not 
inconsistent with the criteria above as may be established by the Amex 
Nominating and Corporate Governance Committee from time to time.\16\
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    \16\ See Article II, Section 1 of the Exchange Constitution.
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    Of the six Industry Governors of the Exchange, (i) two will be 
persons who spend a substantial portion of their time on the floor of 
the Exchange (the ``Floor Governors''); (ii) one will be the owner of a 
regular or options principal membership (the ``Membership Governor''); 
(iii) one will be affiliated with regular or associate member 
organizations that engage in a business having substantial direct 
contact with public securities customers (the ``Upstairs Governor''); 
(iv) one will be a director, officer, employee or representative of an 
issuer of securities that are listed on the Exchange (the ``Listed 
Company Governor''); and (v) one will be the Exchange's Chief Executive 
Officer (the ``Management Governor'').\17\
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    \17\ See Article II, Section 1 of the Exchange Constitution.
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    The nominees submitted to the Members for election as Governors 
upon the nomination of the Amex Nominating and Corporate Governance 
Committee will reflect the applicable terms of office and the 
classifications of Governors as set forth above.\18\
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    \18\ See Article I, Section 1.14 of the Amended MC By-Laws.
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    The Chairman of the Exchange Board of Governors may be the 
Management Governor or any Independent Governor. If the Management 
Governor is designated as the Chairman of the Exchange Board of 
Governors, the Board will also designate an Independent Governor as the 
``Lead Governor'' to preside over executive sessions of the Exchange 
Board of Governors. The Management Governor will not participate in 
executive sessions (i.e., meetings of the Exchange Board of Governors 
without management or staff of the Exchange). The Exchange will 
publicly disclose the Lead Governor's name and a means by which 
interested parties may communicate with the Lead Governor. If a Lead 
Governor has been designated by the Exchange Board of Governors, the 
Lead Governor will exercise the powers and discharge the duties of the 
Chairman in calling and presiding at meetings of the Exchange Board of 
Governors in the case of the absence or inability to act of the 
Chairman.\19\
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    \19\ See Article II, Section 3 of the Exchange Constitution.
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    (ii) The Exchange Nomination and Election Procedures. During the 
six-month transition period, the Members will elect a new Board of 
Governors of the Exchange that will be composed of fifteen members. 
Eight of the fifteen Governors will be elected to an initial two-year 
term and the remaining seven Governors will be elected to an initial 
one-year term.\20\ The first year of each term will be extended or 
shortened depending upon whether the first election is held before or 
after July 1, 2004. Thereafter, there will be an annual meeting for the 
election of Governors to succeed those Governors whose terms have 
expired. After the election of the new Exchange Board of Governors, all 
Governors elected at the annual meeting for the election of Governors 
will serve two-year terms and will hold office until their successors 
are elected. All candidates to be submitted to the Members for election 
as Governors, members of the Amex Adjudicatory Council (``Council 
Members'') and Trustees of the Gratuity Fund (``Trustees'') will be 
selected by either (i) the Amex Nominating and Corporate Governance 
Committee or (ii) by petition of the Members to the Amex Nominating and 
Corporate Governance Committee.\21\
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    \20\ See supra note 9.
    \21\ See Article III, Section 1 of the Exchange Constitution.
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    The Amex Nominating and Corporate Governance Committee will report 
to MC at least eight weeks prior to the date of the annual meeting of 
the Members, the names of candidates nominated by it as Governors, 
Council Members and Trustees. The report of the Amex Nominating and 
Corporate Governance Committee will be promptly disseminated or made 
available to the Members by posting or other appropriate means and will 
be promptly forwarded to the Secretary of MC for mailing to the Members 
in accordance with the Amended MC By-Laws (as in effect on the 
effective date of the amended Exchange Constitution or as amended in 
accordance with section 9.01 of such By-Laws as in effect on the

[[Page 45094]]

effective date of the amended Exchange Constitution).\22\
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    \22\ See Article III, Section 2 of the Exchange Constitution.
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    The Members may propose nominees for Governors, Council Members and 
Trustees to the Amex Nominating and Corporate Governance Committee for 
consideration by written submission filed with the Secretary of the 
Exchange for delivery to the Amex Nominating and Corporate Governance 
Committee not less than 12 weeks prior to the date of the annual 
meeting of the Members. In the event that any question is raised as to 
whether any candidate meets the criteria for the appropriate 
classification, such matter shall be determined by the Amex Nominating 
and Corporate Governance Committee, subject to the right of appeal to 
the full Board of Governors.\23\
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    \23\ See Article III, Section 3 of the Exchange Constitution.
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    Members may also nominate candidates for Governors, Council Members 
and Trustees by written petition filed with the Amex Nominating and 
Corporate Governance Committee within three weeks after the 
dissemination of the report of the Amex Nominating and Corporate 
Governance Committee. In the event that any question is raised as to 
the validity of the signatures set forth on a petition or whether any 
candidate meets the criteria for the appropriate classification, such 
matter shall be determined by the Amex Nominating and Corporate 
Governance Committee, subject to the right of appeal to the full Board 
of Governors. The persons nominated by valid petition shall be deemed 
nominees for the offices and positions set forth in such petition and 
shall be included on the ballot sent to MC by the Amex Nominating and 
Corporate Governance Committee. A statement of the candidates nominated 
by petition will be promptly disseminated or made available to the 
Members by posting or other appropriate means and will be promptly 
forwarded to the Secretary of MC for mailing to the Members in 
accordance with the Amended MC By-Laws (as in effect on the effective 
date of the amended Exchange Constitution or as amended in accordance 
with section 9.01 of such By-Laws as in effect on the effective date of 
the amended Exchange Constitution). Such nominees will then be voted on 
by the MC Members.\24\
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    \24\ See Article III, Section 4 of the Exchange Constitution.
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    All Exchange Governors, Council Members and Trustees will be 
elected by a plurality of votes cast by the Members.\25\ Thereafter, MC 
will vote its Class A Participation Interest in the Exchange to elect 
those Governors, Council Members and Trustees selected by the vote of 
the Members.
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    \25\ The Exchange Constitution, as amended, provides that the 
Chairman of the Gratuity Fund shall make a report to the Chairman of 
the Exchange Board of Governors regarding the condition of the 
Gratuity Fund, rather than to the Chief Executive Officer of the 
Exchange, as provided by the current Exchange Constitution.
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    The time periods set forth above may be equitably adjusted by the 
Amex Nominating and Corporate Governance Committee with respect to the 
first election of Governors occurring following April 1, 2004, to 
facilitate a prompt initial election; provided, however, in no event 
shall the petition period described in the proceeding paragraph be less 
than 10 business days.\26\
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    \26\ See Article III, Section 5 of the Exchange Constitution.
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    (iii) Matters Requiring Consent of MC or Members\27\. The amended 
Exchange Constitution will prohibit the Exchange, without MC's consent, 
from (i) selling, issuing, transferring or otherwise disposing of any 
limited liability company interest or other equity security of the 
Exchange or any notes or debt securities of the Exchange containing 
equity features, (ii) issuing any new trading rights, or (iii) issuing 
additional memberships. Any consent of MC requested by the Exchange to 
take such actions will only be granted by MC upon the affirmative vote 
of a majority of the Members.\28\ In addition, without the affirmative 
vote of a majority of the Members, MC may not sell, issue, transfer or 
otherwise dispose of any equity security of the Exchange or any notes 
or debt securities of the Exchange containing equity features.\29\
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    \27\ See Article II, Section 8 and Article XIII, Section 1 of 
the Exchange Constitution and Sections 7, 8 and 9 of the Second 
Restated MC Certificate of Incorporation.
    \28\ See Sections 7(a) and 9 of the Second Restated MC 
Certificate of Incorporation.
    \29\ See Section 7(b) of the Second Restated MC Certificate of 
Incorporation.
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    The amended Exchange Constitution will also provide that certain of 
its provisions may not be amended without the consent of MC. The 
provisions requiring consent from the board of MC to amend include:
     Article II, Section 1 (Classification of the Exchange 
Board of Governors);
     Article II, Section 6 (Standing Committees);
     Article III (Nomination and Election Procedures);
     Article XIII, Sections 1 and 3 (Procedure, Adoption of 
Amendments Requiring the Consent of MC); and
     Any amendment to the Constitution that would result in a 
material change in the market structure or operations of the Exchange.
    Other than the provisions above, the provisions of the amended 
Exchange Constitution may be amended or repealed, and new provisions 
may be adopted, only if approved by a majority of Governors then in 
office in accordance with the procedure as specified in Article XIII of 
the amended Exchange Constitution.
    (iv) Officers of the Exchange \30\. A Chief Regulatory Officer will 
be added to the Chief Executive Officer, Treasurer and Secretary, as 
the officers of the Exchange. The Chief Regulatory Officer will be 
responsible for the management and administration of the regulatory 
functions of the Exchange and will be appointed by the Regulatory 
Oversight Committee.\31\ The Chief Regulatory Officer will report 
directly to the Regulatory Oversight Committee and to the Chief 
Executive Officer (or the Chief Executive Officer's designee). The 
Exchange Board of Governors will have the power to remove the Chief 
Regulatory Officer only with the advice and consent of the Regulatory 
Oversight Committee. The Treasurer and Secretary will continue to be 
appointed by the Chief Executive Officer, subject to the approval of 
the Exchange Board of Governors. In addition, internal auditors shall 
report directly to the Audit Committee and (to the extent that they are 
officers or employees of the Exchange)\32\ to the Chief Executive 
Officer or the Chief Executive Officer's designee and shall not be 
removed without the advice and consent of the Audit Committee.
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    \30\ See Article II, Section 4 of the Exchange Constitution.
    \31\ See Section entitled ``Regulatory Oversight Committee'' in 
Section II.G(v) of this Notice, below.
    \32\ After the closing of the Transaction, it is expected that 
NASD will continue to provide the internal audit function services 
pursuant to a transition services agreement with the Exchange. 
Consequently, the internal auditors will not initially be the 
officers or employees of the Exchange.
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    (v) Standing Committees of the Exchange \33\. The amended Exchange 
Constitution will provide for the creation of a number of new standing 
committees of the Exchange composed primarily of independent Governors. 
Specifically, the amended Exchange Constitution will provide for (i) a 
Nominating and Corporate Governance Committee, (ii) an Executive 
Committee, (iii) an Audit Committee, (iv) a Regulatory Oversight 
Committee, and (v) a Compensation Committee. Any

[[Page 45095]]

power that has been delegated to any such Standing Committee may not be 
delegated to any other committee formed by the Exchange Board of 
Governors.\34\
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    \33\ See Article II, Section 6 of the Exchange Constitution.
    \34\ To establish the Standing Committees as described in this 
Section II.A.1.G.(v) and facilitate the transition, Industry 
Governors may serve as members of the Standing Committees until the 
earlier of (i) the six-month anniversary of the closing of the 
acquisition by MC (or MC Acquisition Sub) of the Class Participation 
B Interest (the ``Class B Interest Acquisition Closing Date'') or 
(ii) the date of the election of the Board of Governors first 
succeeding the Class B Interest Acquisition Closing Date.
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    Amex Nominating and Corporate Governance Committee. The Amex 
Nominating and Corporate Governance Committee will be appointed by the 
Exchange Board of Governors and will consist of three Governors, two of 
whom shall be Independent Governors and one of whom shall be the 
Membership Governor, as established by resolution adopted by a majority 
of the Board of Governors then in office. The Amex Nominating and 
Corporate Governance Committee will, among other things: (i) Establish 
criteria and procedures for the nomination of Governors, Council 
Members and Trustees; (ii) review the qualifications of and, when 
necessary and appropriate, interview candidates who may be proposed for 
nomination as Governors, Council Members and Trustees; (iii) submit to 
MC, in its capacity as the Class A Interest holder, a list of nominees 
for the election of Governors, Council Members and Trustees; (iv) 
monitor and consider the Exchange's corporate governance practices; (v) 
consider and make recommendations concerning the composition, 
organization and functions of the Exchange Board of Governors; (vi) 
review periodically the performance of the Exchange Board of Governors; 
(vii) review periodically the Exchange Constitution; (viii) make 
periodic reports to the entire Exchange Board of Governors on such 
matters within its powers and responsibilities as the Board of 
Governors may specify; and (ix) perform such other duties in connection 
with the selection, election or termination of the Governors, Council 
Members and Trustees or other corporate governance matters as the 
Exchange Board of Governors may request.
    Any vacancy in the Amex Nominating and Corporate Governance 
Committee will be filled by its remaining members, who will elect a 
Governor qualified to fill the vacancy. The NASD Nominating Committee 
will cease to exist upon the closing of the Transaction.
    Executive Committee. The Executive Committee will be appointed by 
the Exchange Board of Governors, upon the recommendation of the Amex 
Nominating and Corporate Governance Committee, and will consist of 
three to five Governors, at least a majority of whom will be 
Independent Governors and at least one of whom shall be an Industry 
Governor. The Executive Committee will have reasonable access during 
normal working hours to all information (including all books and 
records) respecting the Exchange and its assets. The Executive 
Committee, to the extent permitted by law, will have and may exercise, 
when the Exchange Board of Governors is not in session, all powers of 
the Exchange Board of Governors regarding the supervision of the 
management of the business and affairs of the Exchange.
    Audit Committee. The Audit Committee will be appointed by the 
Exchange Board of Governors, upon the recommendation of the Amex 
Nominating and Corporate Governance Committee, and will consist of 
three to five Independent Governors. The Audit Committee will: (i) Have 
the authority to consider the qualification of the Exchange's 
independent public accountants, to make recommendations to the Exchange 
Board of Governors as to their selection and retention, and to review 
and resolve disputes between such independent public accountants and 
management relating to the preparation of the annual financial 
statements; (ii) confer with the Exchange's independent public 
accountants to determine the scope of the audit that such accountants 
will perform; (iii) receive reports from the independent public 
accountants and transmit such reports to the Exchange Board of 
Governors, and after the close of the fiscal year, transmit to the 
Exchange Board of Governors the financial statements certified by such 
accountants; (iv) inquire into, examine and make comments on the 
accounting procedures of the Exchange and the reports of the 
independent public accountants; (v) consider and make recommendations 
to the Exchange Board of Governors upon matters presented to it by the 
officers of the Exchange pertaining to the audit practices and 
procedures adhered to by the Exchange; (vi) appoint the internal 
auditors of the Exchange (who shall report directly to the Audit 
Committee and who shall not be terminated without the advice and 
consent of the Audit Committee; to the extent that such internal 
auditors are officers or employees of the Exchange, they shall also 
report to the Chief Executive Officer or the Chief Executive Officer's 
designee); and (vii) make periodic reports to the entire Exchange Board 
of Governors on such matters within its powers and responsibilities as 
the Exchange Board of Governors may specify.
    Regulatory Oversight Committee. The Exchange will establish a 
Regulatory Oversight Committee which will: (i) Have authority to 
determine the Exchange's regulatory scheme, programs, budget and 
staffing proposals annually; (ii) appoint and direct the Chief 
Regulatory Officer; (iii) advise the Compensation Committee with 
respect to and approve the compensation (or any change thereto) of the 
Chief Regulatory Officer; (iv) be responsible for assessing regulatory 
performance on a regular basis; (v) have the authority to recommend the 
adoption of rules to the Exchange Board of Governors concerning such 
matters as may be specified in the Regulatory Oversight Committee's 
charter; and (vi) make periodic reports to the entire Exchange Board of 
Governors on such matters within its powers and responsibilities as the 
Exchange Board of Governors may specify. The Chief Regulatory Officer 
will report directly to the Regulatory Oversight Committee and to the 
Chief Executive Officer (or the Chief Executive Officer's designee).
    The Regulatory Oversight Committee will be appointed by the 
Exchange Board of Governors, upon the recommendation of the Amex 
Nominating and Corporate Governance Committee, and will consist of 
three to five Independent Governors and one Industry Governor. The 
Independent Governors serving as members of the Regulatory Oversight 
Committee will be the only voting members of the committee. The 
Industry Governor serving as a member of the Regulatory Oversight 
Committee will be a non-voting member. The Chief Regulatory Officer 
will report directly to the Regulatory Oversight Committee and to the 
Chief Executive Officer (or the Chief Executive Officer's designee). 
The Exchange Board of Governors will have the power to remove the Chief 
Regulatory Officer only with the advice and consent of the Regulatory 
Oversight Committee.
    Compensation Committee. The Compensation Committee will be 
appointed by the Exchange Board of Governors, upon the recommendation 
of the Amex Nominating and Corporate Governance Committee, and will 
consist of three to five Independent Governors. The Compensation 
Committee will have and may exercise all of the authority of the 
Exchange Board of Governors in administering the Exchange's

[[Page 45096]]

management compensation plans, and will be responsible for, among other 
things: (i) Reviewing and approving performance goals relevant to the 
compensation of the Chief Executive Officer and evaluating the Chief 
Executive Officer's performance in achieving such goals, and 
recommending the compensation of the Chief Executive Officer to the 
Exchange Board of Governors; (ii) recommending to the Exchange Board of 
Governors the compensation of executive officers of the Exchange; (iii) 
causing to be publicly disclosed on an annual basis the compensation 
(and methodology behind such compensation) of the Governors and the 
five most highly compensated officers of the Exchange; and (iv) making 
periodic reports to the entire Exchange Board of Governors on such 
matters within its powers and responsibilities as the Exchange Board of 
Governors may specify.
    (vi) Seat Owners Advisory Committee.\35\ Under the amended Exchange 
Constitution, the Exchange Board of Governors will create and consult 
with the Seat Owners Advisory Committee (``SOAC''), consisting of 
representatives of various constituencies of the Exchange as SOAC shall 
deem appropriate.
---------------------------------------------------------------------------

    \35\ See Article II, Section 3 of the Exchange Constitution.
---------------------------------------------------------------------------

    (vii) Amex Adjudicatory Council.\36\ The Amex Adjudicatory Council 
shall consist of six individuals, three of whom shall be Industry 
Governors (``Industry Council Members''), and three of whom shall be 
Independent Governors (``Independent Council Members'').\37\ All 
Council Members shall be nominated and elected in accordance with the 
procedures as described above in Section II.A.1.G.(ii) of this Notice. 
In the event that a Council Member is precluded from participating in 
the Council's consideration of a particular matter due to a conflict of 
interest, the Board of Governors shall appoint a Governor within the 
same classification for the position to serve as a substitute for such 
Council Member with respect to the particular matter. In the event that 
a Governor fitting the relevant classification is not available to 
serve as a substitute, the Board of Governors may appoint a person who 
would be qualified to serve as a Governor within such classification 
(Industry Governor or Independent Governor). If a position on the Amex 
Adjudicatory Council becomes vacant, whether because of death, 
disability, disqualification, removal or resignation, the Board of 
Governors shall appoint a Governor within the same classification 
(Industry or Independent Council Member) to fill the vacancy until the 
next annual election of such Council members.\38\
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    \36\ See Article II, Section 7 of the Exchange Constitution.
    \37\ Under the current Exchange Constitution, the Amex 
Adjudicatory Council consists of three floor governors (who spend a 
substantial part of their time on the floor of the Exchange) and 
three public governors (who are the representatives of the public 
(i) none of whom is, or is affiliated with, a broker or dealer in 
securities and (ii) all of them are nominated by the NASD Nominating 
Committee).
    \38\ Under the current Exchange Constitution, the Board of 
Directors of MC was authorized to fill such vacancies.
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    (viii) Confidential Information.\39\ All confidential information 
of the Exchange pertaining to the self-regulatory function of the 
Exchange, including all books and records of the Exchange reflecting 
such confidential information (including but not limited to regulatory 
investigations, examinations, disciplinary matters, and to the extent 
designated by the Exchange as confidential, trading data and trading 
practices) will be retained in confidence by each Governor, the 
Exchange and its personnel, and will not be used by each Governor, the 
Exchange and its personnel for any non-regulatory purposes and shall 
not be made available to any persons (including, without limitation, 
any Members of the Exchange) except that such confidential information 
may be disclosed: (i) To those personnel of the Exchange and to members 
of the Board of Governors of the Exchange to the extent necessary or 
appropriate to properly discharge the self-regulatory responsibilities 
of the Exchange; (ii) to the extent required by applicable statute, 
rule or regulation or any court of competent jurisdiction; and (iii) to 
the extent that such confidential information has become generally 
available publicly through no fault of the Exchange or its Governors, 
officers, employees or advisors. The purpose of this provision is to 
help ensure that confidential information relating to the Exchange's 
self-regulatory function is accorded appropriate confidential treatment 
and is not misused.
---------------------------------------------------------------------------

    \39\ See Article II, Section 3 of the Exchange Constitution.
---------------------------------------------------------------------------

    Notwithstanding the foregoing, such confidential information of the 
Exchange shall be subject at all times to inspection and copying by the 
Commission at no additional cost to such Commission. Nothing in the 
Exchange Constitution shall be interpreted as to limit or impede the 
rights of the Commission to access and examine such confidential 
information of the Exchange pursuant to the U.S. federal securities 
laws and the rules thereunder, or to limit or impede the ability of a 
Governor, the Exchange and its personnel to disclose such confidential 
information to the Commission.
    H. Exchange Limited Liability Company Agreement. The Amended 
Exchange LLC Agreement, which was filed as part of this rule filing and 
is available on the Commission's Web site, will become effective upon 
the closing of the Transaction. Among other things, the Amended 
Exchange LLC Agreement will establish the rights and obligations of MC 
and MC Acquisition Sub as equity owners of the Exchange and vest the 
Exchange Board of Governors with its management powers.
    (i) Distribution.\40\ The Amended Exchange LLC Agreement will 
provide that no distribution to MC and MC Acquisition Sub, as 
participants of the Exchange, shall include revenues received by the 
Exchange from regulatory fines, fees or penalties. The purpose of this 
provision is to ensure that the regulatory authority of the Exchange is 
not used improperly to benefit the holders of the Exchange's LLC 
interests.
---------------------------------------------------------------------------

    \40\ See Article IV, Section 4.6 of the Amended Exchange LLC 
Agreement.
---------------------------------------------------------------------------

    (ii) Indemnification.\41\ The Amended Exchange LLC Agreement will 
also provide that the Exchange will indemnify the Governors, officers, 
committee members, employees and agents of the Exchange to the fullest 
extent permitted by law, as well as the interestholders of the Exchange 
and their respective directors, officers, committee members, employees 
and agents, if any such person acted in good faith and in a manner he 
or she reasonably believed to be in or not opposed to the best 
interests of the Exchange and, with respect to any criminal action or 
proceeding, had no reasonable cause to believe his or her conduct was 
unlawful. The plea of nolo contendere or its equivalent shall not, of 
itself, create a presumption that such person did not act in good faith 
and in a manner which he or she reasonably believed to be in or not 
opposed to the best interests of the Exchange, and, with respect to any 
criminal action of proceeding, had reasonable cause to believe that his 
or her conduct was unlawful.
---------------------------------------------------------------------------

    \41\ See Article VI of the Amended Exchange LLC Agreement.
---------------------------------------------------------------------------

    The personal liability of the Governors of the Exchange will be 
eliminated to the fullest extent permitted by the General Corporation 
Law of the State of Delaware, as the

[[Page 45097]]

same exists or may hereafter be amended.\42\ No amendment or repeal of 
Section 6.6 of the Amended Exchange LLC Agreement shall apply to or 
have any effect on the liability or alleged liability of any Governor 
of the Exchange for or with respect to any act or omission on the part 
of such Governor occurring prior to such amendment or repeal.\43\
---------------------------------------------------------------------------

    \42\ See Article VI, Section 6.6 (Fiduciary Duty) of the Amended 
Exchange LLC Agreement.
    \43\ Id.
---------------------------------------------------------------------------

    In furtherance of this indemnification obligation, the Amended 
Exchange LLC Agreement will provide that the Exchange may purchase and 
maintain insurance on behalf of certain persons whether or not the 
Exchange would have the power to indemnify those persons pursuant to 
the Amended Exchange LLC Agreement. Moreover, the Amended Exchange LLC 
Agreement will require the Exchange to cause MC and the MC Acquisition 
Sub to be covered under the Exchange's insurance policies to the same 
extent as the Governors, officers, committee members, employees and 
agents of the Exchange. Such insurance policies must insure against at 
least matters relating to or arising from the Transaction.
    (iii) Amendment.\44\ Any amendment to or repeal of any provision of 
the Amended Exchange LLC Agreement shall not be effective until the 
same is filed with or filed with and approved by the Commission, under 
Section 19 of the Act \45\ and the rules promulgated thereunder, as the 
case may be.
---------------------------------------------------------------------------

    \44\ See Article XI, Section 11.3 of the Amended Exchange LLC 
Agreement.
    \45\ 15 U.S.C. 78s.
---------------------------------------------------------------------------

    (iv) Direct Transfer of Ownership Interests in the Exchange.\46\ 
Under the Amended Exchange LLC Agreement, any sale, issuance, transfer 
or other disposition in any single transaction or series of 
transactions of (A) any limited liability company interests or other 
equity security of the Exchange or any securities convertible into or 
exchangeable for, or options rights or warrants to acquire, any such 
equity securities or (B) any notes or debt securities containing equity 
features (including, without limitation, any notes or debt securities 
convertible into or exchangeable for any equity securities or 
containing profit participation features) shall: (i) Be made only in 
compliance with the member vote procedures set forth in Section 7(a) of 
the Second Restated Certificate of Incorporation of MC; and (ii) be 
subject to prior approval by the Commission pursuant to the rule filing 
procedure under Section 19 of the Act,\47\ and the rules promulgated 
thereunder. Any attempt to issue or transfer any such equity interests 
or any rights thereunder in violation of the preceding sentence shall 
be null and void ab initio. The purpose of this provision is to provide 
the Commission with the ability to review and subject to public notice 
and comment the transfer of any ownership interests of the Exchange.
---------------------------------------------------------------------------

    \46\ See Article IX, Section 9.3 of the Amended Exchange LLC 
Agreement.
    \47\ 15 U.S.C. 78s.
---------------------------------------------------------------------------

    I. Second Restated MC Certificate of Incorporation. MC will adopt a 
Second Restated MC Certificate of Incorporation upon the closing of the 
Transaction, which was filed as part of this rule filing and is 
available on the Commission's Web site.
    (i) Purpose.\48\ Under the Second Restated MC Certificate of 
Incorporation, the purposes of MC continue to be: (i) Directly or 
indirectly holding, acquiring, exchanging, or disposing of equity or 
other interests in the Exchange and exercising the rights incident to 
its ownership; and (ii) to conduct and carry on only activities 
incidental to and in furtherance of the foregoing which may lawfully be 
conducted and carried on by a corporation of its type formed under the 
New York Not-for-Profit Corporation Law.
---------------------------------------------------------------------------

    \48\ See Section 3 of the Second Restated MC Certificate of 
Incorporation.
---------------------------------------------------------------------------

    (ii) Required Consents. \49\ The Exchange will be required to 
obtain MC's consent prior to (i) the authorization, issuance or grant 
of any new trading rights on the Exchange, and (ii) the sale, issuance, 
transfer or other disposition in a single transaction or series of 
transactions of any equity security of the Exchange, or any notes or 
debt securities of the Exchange containing equity features. With 
respect to such matters, promptly upon receiving a written request from 
the Exchange, the Secretary of MC will call a meeting of the holders of 
the memberships entitled to vote thereat to vote on the matter. If the 
required number of memberships are voted in favor of authorizing such 
matter, the proper officers of MC shall promptly grant the MC's consent 
to the Exchange. Any such consent shall be granted by MC only upon the 
affirmative vote of a majority of the regular memberships and the 
options principal memberships voted (as a single class) at a meeting 
duly called and convened and at which a quorum is present. If a 
proposed matter is not approved at the duly convened meeting convened 
with respect thereto, the request for such matter shall not be 
submitted again to the membership for a period of ninety days.\50\
---------------------------------------------------------------------------

    \49\ See Section 7(a) and 7(b) of the Second Restated MC 
Certificate of Incorporation.
    \50\ See Section 7(a) of the Second Restated MC Certificate of 
Incorporation.
---------------------------------------------------------------------------

    MC will be required to obtain the consent of the majority of the 
memberships entitled to vote in order for it to transfer, sell or 
otherwise dispose of its or an affiliate's interest in the Exchange. If 
such matter is not approved at the duly convened meeting convened with 
respect thereto, the request for such matter shall not be submitted 
again to the membership for a period of ninety days.\51\
---------------------------------------------------------------------------

    \51\ See Section 7(b) of the Second Restated MC Certificate of 
Incorporation.
---------------------------------------------------------------------------

    (iii) Indirect Transfer of Ownership Interests in the Exchange. 
\52\ Under the Second Restated MC Certificate of Incorporation, any 
sale, issuance, transfer or other disposition in any single transaction 
or series of transactions of (A) any equity securities of MC or MC Sub, 
or any securities convertible into or exchangeable for, or options 
rights or warrants to acquire, any such equity securities, or (B) any 
notes or debt securities containing equity features (including, without 
limitation, any notes or debt securities convertible into or 
exchangeable for any equity securities or containing profit 
participation features) shall be subject to prior approval by the 
Commission pursuant to the rule filing procedure under Section 19 of 
the Act \53\ and the rules promulgated thereunder; provided that the 
foregoing shall not apply to any sale, transfer or other disposition of 
seats or membership interests of the MC. Any attempt to issue or 
transfer such equity interest or any rights thereunder in violation of 
the preceding sentence shall be null and void ab initio. The purpose of 
this provision is to provide the Commission the authority to review and 
subject to public notice and comment any transfer of indirect ownership 
interests in the Exchange other than the transfer of membership 
interests.
---------------------------------------------------------------------------

    \52\ See Section 7(c) of the Second Restated MC Certificate of 
Incorporation.
    \53\ 15 U.S.C. 78s.
---------------------------------------------------------------------------

    (iv) Issuance of Additional Memberships. Upon receiving a written 
request from the Exchange for an amendment to the Second Restated MC 
Certificate of Incorporation to authorize the issuance of additional 
memberships of any class, the Secretary of MC shall call a meeting of 
the holders of memberships entitled to vote thereat to vote on such 
request in accordance with the Amended MC By-Laws. Such an amendment 
may be authorized, and

[[Page 45098]]

such additional memberships may be issued, only upon the affirmative 
vote of a majority of the regular memberships and the options principal 
memberships voted (as a single class) at a duly convened meeting.\54\
---------------------------------------------------------------------------

    \54\ See Section 9 of the Second Restated MC Certificate of 
Incorporation.
---------------------------------------------------------------------------

    (v) Elections. The Members will have the right to elect any 
Governors, Council Members and Trustees that MC, as the Class A 
Interestholder, is entitled to vote upon in accordance with the amended 
Exchange Constitution and in accordance with the procedures set forth 
in the Amended MC By-Laws.\55\
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    \55\ See Section 8 of the Second Restated MC Certificate of 
Incorporation.
---------------------------------------------------------------------------

    (vi) Indemnification. \56\ The Second Restated MC Certificate of 
Incorporation will also provide limitation of liability and 
indemnification for MC directors and officers. Under the Second 
Restated MC Certificate of Incorporation, MC will to the fullest extent 
permitted by law, indemnify any person who is or was made, or 
threatened to be made, a party to any threatened, pending or completed, 
action, suit or proceeding, whether civil, criminal, administrative or 
investigative, including, without limitation, an action by or in the 
right of MC to procure a judgment in its favor, by reason of the fact 
that such person, or a person of whom such person is the legal 
representative, is or was a director or officer of MC, or is or was 
serving in any capacity at the request of MC for any other corporation, 
partnership, joint venture, trust, employee benefit plan or other 
enterprise, against judgments, fines, penalties, excise taxes, amounts 
paid in settlement (with the written consent of MC which shall not be 
unreasonably withheld) and costs, charges and expenses (including 
attorneys' fees and disbursements). Notwithstanding the foregoing, no 
indemnification shall be provided to or on behalf of any director or 
officer if a judgment or other final adjudication adverse to such 
director or officer establishes that (i) his or her acts were committed 
in bad faith or were the result of active an deliberate dishonesty and, 
in either case, were material to the cause of action so adjudicated, 
(ii) he or she personally gained in fact a financial profit or other 
advantage to which he or she was not legally entitled or (iii) his or 
her acts violated Section 719 of the New York Not-for-Profit 
Corporation Law. MC will have the power to purchase insurance for its 
officers and directors.
---------------------------------------------------------------------------

    \56\ See Section 11 of the Second Restated MC Certificate of 
Incorporation.
---------------------------------------------------------------------------

    (vii) Books and Records. \57\ MC shall keep at the office of MC or 
such other locations within the United States as may from time to time 
be designated by the Board of Directors correct and complete books and 
records of account and minutes of the proceedings of its Members, Board 
of Directors and committees, if any, and a list of the names, 
addresses, and classes of membership of the Members. Any of the 
foregoing books, minutes and records may be in written form or in any 
other form capable of being converted into written form within a 
reasonable time. To the extent that the foregoing books, minutes and 
records are related to the activities of the Exchange, such books, 
minutes and records shall be deemed to be the books, minutes and 
records of the Exchange for the purposes of Section 17(b) of the 
Act,\58\ and shall be subject at all times to inspection and copying by 
the Commission and the Exchange. The Exchange believes that such 
provision would provide the Commission and the Exchange with the 
authority to inspect and copy the books, records and minutes of MC 
relating to the activities of the Exchange and therefore help the 
Commission and the Exchange carry out their regulatory 
responsibilities.
---------------------------------------------------------------------------

    \57\ See Section 12 of the Second Restated MC Certificate of 
Incorporation.
    \58\ 15 U.S.C. 78q(b).
---------------------------------------------------------------------------

    (viii) Officers and Directors. \59\ With respect to conduct by the 
officers and directors of MC that relates to the activities of the 
Exchange, such officers and directors shall be deemed to be the 
officers and directors of the Exchange solely for the purposes of the 
removal and censure authority of the Commission pursuant to Section 
19(h)(4) of the Act.\60\
---------------------------------------------------------------------------

    \59\ See Section 13 of the Second Restated MC Certificate of 
Incorporation.
    \60\ 15 U.S.C. 78s(h)(4).
---------------------------------------------------------------------------

    For so long as MC shall control, directly or indirectly, the 
Exchange, each officer, director and employee of MC shall give due 
regard to the preservation of the independence of the self-regulatory 
function of the Exchange and to the Exchange's obligations under the 
Act, and the rules thereunder, including, without limitation, Section 
6(b) of the Act,\61\ and shall not take any actions which he or she 
knows or reasonably should have known would interfere with the 
effectuation of any decisions by the Board of Governors of the Exchange 
relating to its regulatory functions (including disciplinary matters) 
or which would adversely affect the ability of the Exchange to carry 
out its responsibilities under the Act.
---------------------------------------------------------------------------

    \61\ 15 U.S.C. 78f(b).
---------------------------------------------------------------------------

    (ix) Consent to Jurisdiction \62\. For so long as MC shall control, 
directly or indirectly, the Exchange, MC shall, and its officers, 
directors and employees by virtue of their acceptance of such position 
shall be deemed to, irrevocably submit to the exclusive jurisdiction of 
the United States federal courts, the Commission, and the Exchange, 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 the 
Exchange, and MC shall, and by virtue of their acceptance of any such 
position, the officers, directors and employees of MC 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 Commission 
as to such matters, 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 thereof may not be enforced in 
or by such courts or agency.
---------------------------------------------------------------------------

    \62\ See Section 14 of the Second Restated MC Certificate of 
Incorporation.
---------------------------------------------------------------------------

    (x) Cooperation with the Commission \63\. For so long as MC shall 
control, directly or indirectly, the Exchange, MC shall, and the 
officers, directors and employees of MC by virtue of their acceptance 
of such position shall be deemed to, agree to cooperate with the 
Commission and the Exchange, in respect of said Commission's oversight 
responsibilities regarding the Exchange and the self-regulatory 
functions and responsibilities of the Exchange. MC shall take 
reasonable steps to ensure that its agents similarly cooperate with the 
Commission.
---------------------------------------------------------------------------

    \63\ See Section 15 of the Second Restated MC Certificate of 
Incorporation.
---------------------------------------------------------------------------

    (xi) Confidential Information \64\. All confidential information of 
the Exchange pertaining to the self regulatory function of the 
Exchange, including books, minutes and records of the Exchange 
reflecting such confidential information (including but not limited to 
regulatory investigations, examinations, disciplinary matters, and to 
the extent designated by the Exchange as confidential, trading data and 
practices) which shall come into the possession of MC, the officers, 
directors, employees or agents of MC, shall be retained in confidence 
by MC and the officers, directors, employees and agents of MC and shall 
not be used for any

[[Page 45099]]

non-regulatory purposes. MC shall take reasonable steps to ensure that 
its agents will comply with this section. The purpose of this provision 
is to help ensure that confidential information relating to the 
Exchange's self-regulatory function is accorded appropriate 
confidential treatment and is not misused.
---------------------------------------------------------------------------

    \64\ See Section 16 of the Second Restated MC Certificate of 
Incorporation.
---------------------------------------------------------------------------

    Nothing in the Second Restated Certificate of Incorporation shall 
be interpreted as to limit or impede the rights of the Commission or 
the Exchange to access and examine such confidential information 
pursuant to the U.S. federal securities laws and the rules thereunder, 
or to limit or impede the ability of MC and the officers, directors, 
employees or agents of MC to disclose such confidential information to 
the Commission or the Exchange.
    (xii) Further Compliance \65\. MC shall take reasonable steps to 
ensure that its officers, directors and employees comply with Sections 
12, 13, 14, 15 and 16 of the Second Restated MC Certificate of 
Incorporation, which shall include obtaining a written agreement from 
such individuals, as a condition to their initial or continued 
employment or service as a director, that they will comply with or 
consent to, as the case may be, such provisions.
---------------------------------------------------------------------------

    \65\ See Section 17 of the Second Restated MC Certificate of 
Incorporation.
---------------------------------------------------------------------------

    The purpose of the provisions set forth above in paragraphs (vii)-
(xii) of this section is to assist both the Exchange and the Commission 
in exercising their respective regulatory oversight responsibilities 
over the affairs of the Exchange by, among other things, providing 
access to books and records relating to the Exchange and ensuring that 
the officers, directors and employees of MC are aware of and take into 
account such responsibilities and cooperate with the Commission in 
connection therewith.
    (xiii) Amendment \66\. Under the Second Restated MC Certificate of 
Incorporation, for so long as MC controls, directly or indirectly, the 
Exchange, before any change or addition to the Second Restated 
Certificate of Incorporation or By-laws of MC shall be effective, the 
same shall be submitted to the Board of Governors of the Exchange and 
if said Board shall determine that the same constitutes a ``rule of an 
exchange'' as such term is defined in the Act and the rules promulgated 
thereunder, and must be filed with or filed with and approved by the 
Commission before the same may be effective, under Section 19 of the 
Act,\67\ 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. The Exchange believes that this 
provision would provide the Exchange, and the Commission (if 
applicable) the authority to review any amendment to the Second 
Restated Certificate of Incorporation of MC or its By-laws prior to its 
effectiveness in order to help the Exchange and Commission carry out 
their respective regulatory responsibilities.
---------------------------------------------------------------------------

    \66\ See Section 18 of the Second Restated MC Certificate of 
Incorporation.
    \67\ 15 U.S.C. 78s.
---------------------------------------------------------------------------

    J. Amended MC By-Laws. The Amended MC By-Laws will become effective 
upon the closing of the Transaction. The Amended MC By-laws were filed 
as part of the rule filing and is available on the Commission's 
website.
    (i) MC Board of Directors. Under the Amended MC By-laws, at the 
next regular meeting for the election of directors after the closing of 
the Transaction, the Members will elect five directors in accordance 
with the Amended MC By-Laws.
    The MC Board of Directors will be elected for one-year terms and 
will hold office until their successors are elected. No director of MC 
who has served eight consecutive elected terms as a director will be 
eligible for election as a director of MC except after an interval of 
two years; provided, however, that service on the Board of Directors 
prior to January 1, 1999 will not be taken into account for these 
purposes.\68\ Unless otherwise required, each matter shall be decided 
by a vote of a majority of the directors present at the time of the 
vote, provided a quorum is present.\69\
---------------------------------------------------------------------------

    \68\ See Article II, Section 2.03 of the Amended MC By-Laws.
    \69\ See Article II, Section 2.13 of the Amended MC By-Laws.
---------------------------------------------------------------------------

    Vacancies on the MC Board of Directors may be filled for the 
remaining term of such vacant position by a majority vote of all 
remaining MC Directors.\70\ The Amended MC By-Laws will also provide 
limitation of liability and indemnification for MC directors and 
officers.\71\
---------------------------------------------------------------------------

    \70\ See Article II, Section 2.06 of the Amended MC By-Laws.
    \71\ See Article VIII of the Amended MC By-Laws.
---------------------------------------------------------------------------

    (ii) MC Nominating Committee \72\. Under the Amended MC By-laws, 
the MC Nominating Committee will be appointed by the MC Board of 
Directors and will consist of two or three Directors. The MC Nominating 
Committee will: (i) Establish criteria and procedures for the 
nomination of MC Directors; (ii) search for qualified nominees for 
submission to the Members for election; (iii) review the qualifications 
of and, when necessary and appropriate, interview candidates who may be 
proposed for nomination as MC directors; (iv) submit to the Members a 
list of nominees for the election of MC directors; (v) perform any and 
all other duties in connection with the selection, election or 
termination of the MC directors as the MC Board of Directors may 
request; and (vi) make periodic reports to the entire Board of 
Directors on such matters within the Committee's powers and 
responsibilities as the Board of Directors may specify. Any vacancy in 
the MC Nominating Committee will be filled by the Committee's remaining 
members, who will elect a Director qualified to fill the vacancy.
---------------------------------------------------------------------------

    \72\ See Article III, Section 3.03 of the Amended MC By-Laws.
---------------------------------------------------------------------------

    (iii) Nomination and Election Procedures \73\. Under the Amended MC 
By-laws, all candidates to be submitted to the Members for election as 
directors will be selected by either (i) the MC Nominating Committee or 
(ii) by petition of the Members to the MC Nominating Committee.
---------------------------------------------------------------------------

    \73\ See Article I, Sections 1.13 and 1.14 of the Amended MC By-
Laws.
---------------------------------------------------------------------------

    The Members may propose nominees for directors of MC for 
consideration by the MC Nominating Committee by written submission 
filed with the Secretary of MC for delivery to the MC Nominating 
Committee not less than 12 weeks prior to the annual meeting of the 
Members. The eligibility of any candidate proposed in any such 
submission will be determined by the MC Nominating Committee in its 
sole discretion and without the right of appeal.
    The MC Nominating Committee will report to MC at least eight weeks 
prior to the date of the annual meeting of the Members the names of 
candidates nominated by it as directors. Such report will be promptly 
disseminated or made available to Members by posting or other 
appropriate means and will be promptly forwarded to the Secretary of MC 
for mailing to the Members in accordance with the Amended MC By-Laws.
    The Members may nominate candidates for directors of MC by written 
petition filed with the Secretary of MC for delivery to the MC 
Nominating Committee within three weeks after the dissemination of the 
report of the MC Nominating Committee. The eligibility of any candidate 
nominated in any such petition will be determined by the MC

[[Page 45100]]

Nominating Committee. A statement of the candidates nominated by 
petition will be promptly disseminated or made available to Members by 
posting or other appropriate means and will be promptly forwarded to 
the Secretary of MC for mailing to the Members within three days after 
the dissemination in accordance with the Amended MC By-Laws.
    The time periods set forth above may be equitably adjusted by the 
MC Nominating Committee with respect to the first election of directors 
occurring following Apri1 1, 2004, to facilitate a prompt initial 
election; provided, however, in no event shall the petition period 
described in the proceeding paragraph be less than 10 business days.
    Any person nominated by the MC Nominating Committee or by petition, 
whether or not such person is a Member, may be eligible to be elected 
to the MC Board of Directors. The Amended MC By-laws also includes the 
nomination procedures for Governors, Council Members and Trustees of 
the Exchange as described in Section II.A.1.G.(ii) of this Notice.\74\
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    \74\ See Section 1.14 of the Amended MC By-Laws.
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    (iv) Elections \75\. Under the Amended MC By-laws, unless otherwise 
required by the New York Not-for-Profit Corporation Law, by the MC 
Certificate of Incorporation or by the second sentence of this 
paragraph, all matters submitted to a vote of the Members shall be 
decided by the vote of a majority of the Members entitled to vote and 
present in person or by proxy at the meeting. At each meeting of the 
Members for the election of directors of MC, Governors of the Exchange, 
Trustees, and Council Members, such persons shall be elected by a 
plurality of votes cast, in person or by proxy, at such meeting by the 
regular and options principal members voting together as a single class 
and MC, as the holder of the Class A Interest of the Exchange, shall 
vote such Class A Interest so as to cause the election of such persons 
who have been so elected by the regular and options principal members.
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    \75\ See Article I, Sections 1.10 and 1.11 of the Amended MC By-
Laws.
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    (v) Books and Records \76\. Under the Amended MC By-laws, MC shall 
keep at the office of MC or such other locations within the United 
States as may from time to time be designated by the Board of Directors 
correct and complete books and records of account and minutes of the 
proceedings of its Members, Board of Directors and committees, if any, 
and a list of the names, addresses and classes of membership of the 
Members. Any of the foregoing books, minutes and records may be in 
written form or in any other form capable of being converted into 
written form within a reasonable time. To the extent that the foregoing 
books, minutes and records are related to the activities of the 
Exchange, such books, minutes and records shall be deemed to be the 
books, minutes and records of the Exchange for the purposes of Section 
17(b) of the Act,\77\ and shall be subject at all times to inspection 
and copying by the Commission and the Exchange.
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    \76\ See Article VI, Section 6.02 of the Amended MC By-Laws.
    \77\ 15 U.S.C. 78q(b).
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    (vi) Officers and Directors \78\. Under the Amended MC By-laws, 
with respect to conduct by the officers and directors of MC that 
relates to the activities of Amex, such officers and directors shall be 
deemed to be the officers and directors of the Exchange solely for the 
purposes of the removal and censure authority of the Commission 
pursuant to Section 19(h)(4) of the Act.\79\ For so long as MC shall 
control, directly or indirectly, the Exchange, each officer, director 
and employee of MC shall give due regard to the preservation of the 
independence of the self-regulatory function of the Exchange and to the 
Exchange's obligations under the Act and the rules thereunder, 
including, without limitation, Section 6(b) of such Act,\80\ and shall 
not take any actions which he or she knows or reasonably should have 
known would interfere with the effectuation of any decisions by the 
Board of Governors of the Exchange relating to its regulatory functions 
(including disciplinary matters) or which would adversely affect the 
ability of the Exchange to carry out its responsibilities under the 
Act.
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    \78\ See Section 7.05 of the Amended MC By-Laws.
    \79\ 15 U.S.C. 78s(h)(4).
    \80\ 15 U.S.C. 78f(b).
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    (vii) Consent to Jurisdiction \81\. For so long as MC shall 
control, directly or indirectly, the Exchange, MC shall, and its 
officers, directors and employees by virtue of their acceptance of such 
position shall be deemed to, irrevocably submit to the exclusive 
jurisdiction of the United States federal courts, the Commission, and 
the Exchange, 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 the Exchange, and MC shall, and by virtue of their acceptance of any 
such position, the officers, directors and employees of MC 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 
Commission as to such matters, 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 thereof may not be 
enforced in or by such courts or agency.
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    \81\ See Section 7.06 of the Amended MC By-Laws.
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    (viii) Cooperation with the Commission \82\. For so long as MC 
shall control, directly or indirectly, the Exchange, MC shall, and the 
officers, directors and employees of MC by virtue of their acceptance 
of such position shall be deemed to, agree to cooperate with the 
Commission and the Exchange in respect of said Commission's oversight 
responsibilities regarding the Exchange and the self-regulatory 
functions and responsibilities of the Exchange. MC shall take 
reasonable steps to ensure that its agents similarly cooperate with the 
Commission.
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    \82\ See Section 7.07 of the Amended MC By-Laws.
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    (ix) Confidential Information \83\. All confidential information of 
the Exchange pertaining to the self-regulatory function of the 
Exchange, including books, minutes and records of the Exchange 
reflecting such confidential information (including but not limited to 
regulatory investigations, examinations, disciplinary matters, and to 
the extent designated by the Exchange as confidential, trading data and 
practices) which shall come into the possession of MC, the officers, 
directors, employees or agents of MC, shall be retained in confidence 
by MC and the officers, directors, employees and agents of MC and shall 
not be used for any non-regulatory purposes. MC will take reasonable 
steps to ensure that its agents will comply with this section. The 
purpose of this provision is to help ensure that confidential 
information relating to the Exchange's self-regulatory function is 
accorded appropriate confidential treatment and is not misused.
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    \83\ See Section 7.08 of the Amended MC By-Laws.
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    Nothing in the Amended MC By-Laws shall be interpreted as to limit 
or impede the rights of the Commission or the Exchange to access and 
examine such confidential information pursuant to the U.S. Federal 
securities laws and the rules thereunder, or to limit or impede the 
ability of MC, officers, directors, employees or agents of MC to 
disclose such confidential information to the Commission or the 
Exchange.
    (x) Further Compliance \84\. MC will take reasonable steps to 
ensure that its officers, directors and employees

[[Page 45101]]

comply with Sections 6.02, 7.05, 7.06, 7.07 and 7.08 of the Amended MC 
By-Laws, which shall include obtaining a written agreement from such 
individuals, as a condition to their initial or continued employment or 
service as a director, that they will comply with or consent to, as the 
case may be, such provisions.
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    \84\ See Section 7.09 of the Amended MC By-Laws.
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    The purpose of the provisions set forth above in paragraphs (v)-(x) 
of this section is to assist both the Exchange and the Commission in 
exercising their respective regulatory oversight responsibilities over 
the affairs of the Exchange by, among other things, providing access to 
the books and records relating to the Exchange and ensuring that the 
officers, directors and employees of MC are aware of and take into 
account such responsibilities and cooperate with the Commission in 
connection therewith.
    (xi) Amendment \85\. Under the Amended MC By-Laws, for so long as 
MC controls, directly or indirectly, the Exchange, before any change or 
addition to the By-Laws of MC shall be effective, the same shall be 
submitted to the Board of Governors of the Exchange and if said Board 
shall determine that the same constitutes a ``rule of an exchange'' as 
such term is defined in the Act, and the rules promulgated thereunder 
and must be filed with or filed with and approved by the Commission 
before the same may be effective, under Section 19 of the Act,\86\ 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. The Exchange believes that this provision would provide 
the Exchange, and the Commission (if applicable), the ability to review 
any amendment to the Amended MC By-Laws prior to their being effective 
in order to help the Exchange and Commission to effectively carry out 
their respective regulatory responsibilities.
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    \85\ See Section 9.01 of the Amended MC By-Laws.
    \86\ 15 U.S.C. 78s.
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    K. Transparency. In connection with the Transaction, both the 
Exchange and MC will adopt resolutions providing for greater 
transparency of their respective operations. Prior to each annual 
meeting at which directors or Governors, as the case may be, are 
elected, each company will distribute a proxy statement disclosing 
certain matters regarding each of the respective Board's activities for 
the preceding year, pertinent information about the independence of 
Governors and directors and compensation data for the Governors and 
five most highly compensated officers of the Exchange.
2 Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \87\ in general and furthers the 
objectives of Section 6(b)(3)\88\ in particular in that the proposed 
amendments to the Exchange Constitution are designed to assure a fair 
representation of its Members in the selection of its directors and 
administration of its affairs and provide that one or more directors 
shall be representative of issuers and investors and not be associated 
with a Member of the Exchange, broker, or dealer. The current 
Constitution of the Exchange is being amended to institute new 
governance structures for the Exchange. As stated previously, the 
proposed governance structure for the Exchange provides for a Board of 
Governors selected directly by its Members, who will also have the 
opportunity to vote on a ``pass-through'' basis on certain significant 
matters involving the Exchange, including the sale, issuance, transfer 
or other disposition of any equity security of the Exchange or of any 
notes or debt securities of the Exchange containing equity features or 
the issuance of any new trading rights by the Exchange. Under the new 
governance structure, among the six Industry Governors of the Exchange, 
two will be the Floor Governors; one will be the Membership Governor; 
one will be the Upstairs Governor; one will be the Listed Governor; and 
one will be the Management Governor. The Exchange believes that the 
proposed changes will assure a balanced structure of the Exchange Board 
of Governors and fair representation of various constituencies on the 
Exchange Board of Governors.
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    \87\ 15 U.S.C. 78f(b).
    \88\ 15 U.S.C. 78f(b)(3).
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    The new governance provisions will also provide that the Exchange 
Board of Governors will be largely independent and will have board 
committees composed primarily of independent Governors with substantial 
authority over compensation, audit, regulatory and corporate governance 
matters, as well as the nomination of Governors to serve on the 
Exchange Board of Governors. As a result, the Exchange believes that 
these proposed amendments to the Exchange Constitution are consistent 
with the objectives of Section 6(b)(5)\89\ in that they are designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaging in regulating, clearing, settling, 
processing information with respect to and facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest; and are not designed to 
permit unfair discrimination between customers, issuers, brokers and 
dealers.
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    \89\ 15 U.S.C. 78f(b)(5).
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    The Exchange also believes that the proposed amendments to the 
Exchange Constitution are consistent with Section 6(b)(8) of the Act 
\90\ which requires that the rules of the Exchange do not impose any 
burden on competition not necessary or appropriate in furtherance of 
the purposes of the Act. With a new capital and governance structure, 
the Exchange will be better positioned to improve its technology and 
engage in value-enhancing transactions designed to facilitate its long-
term success.
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    \90\ 15 U.S.C. 78f(b)(8).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change will impose no burden on competition not 
necessary or appropriate in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    By letter dated April 15, 2004, counsel for the Amex Seat Owners 
Association (``ASOA'') submitted written comments on a draft of the 
rule filing that was proposed to be transmitted to the Commission, 
which contained many of the same provisions as are contained in the 
current rule filing. ASOA objected to certain of such provisions, 
including: (a) the filing of the MC corporate governance documents as 
part of the Exchange's rule filing and (b) the determination by the 
Exchange Board of Governors as to whether an amendment to such MC 
governance documents would require a subsequent rule filing. The April 
15 ASOA letter also raised certain questions regarding ambiguities in 
certain language contained in the rule filing, which have been 
clarified. By letter dated June 9, 2004, counsel for ASOA submitted 
additional comments on the then-current draft rule filing, which raised 
the following additional concerns: (a) The excessive scope of the 
responsibilities and liabilities of MC directors and officers for 
matters relating to the Exchange; and (b) the

[[Page 45102]]

breadth of MC's obligations with regard to books and records that 
relate to the activities of the Exchange. The concerns raised by the 
ASOA letters were discussed with the Commission staff on several 
occasions, and the forms of the MC corporate governance documents 
attached as Exhibits to the Exchange's 19b-4 filing (which contain 
substantially similar provisions as those on which ASOA commented) 
reflect the outcome of those discussions.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.
    In July 2004, the Board of Governors of the Exchange will consider 
approval of the final forms of the Exchange and MC governance 
documents, including the Exchange Constitution. The Exchange hereby 
consents to extension of the period of time specified in Section 
19(b)(2) of the Act \91\ until at least thirty-five days after the 
Exchange files an appropriate amendment to this filing setting forth 
the completion of all additional action required with respect to this 
proposed rule change.
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    \91\ 15 U.S.C. 78s(b)(2).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:
    Electronic comments:
     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to  [email protected]. Please include 
File Number SR-Amex-2004-50 on the subject line.
    Paper comments:
     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-Amex-2004-50. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for inspection 
and copying in the Commission's Public Reference Section, 450 Fifth 
Street, NW., Washington, DC 20549. Copies of such filing also will be 
available for inspection and copying at the principal office of the 
Amex. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
Amex-2004-50 and should be submitted on or before August 18, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\92\
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    \92\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-17113 Filed 7-27-04; 8:45 am]
BILLING CODE 8010-01-P