Amended and Restated Limited Liability Company Agreement of NYSE American Options LLC

114 Pages·2014·0.61 MB·English

by  Sitron, Neil

Execution Version

AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
NYSE AMEX OPTIONS LLC,
a Delaware limited liability company
dated as of May 14, 2014

THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR
REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES OR OTHER LAWS.
BECAUSE SUCH SECURITIES HAVE NOT BEEN REGISTERED OR QUALIFIED THEY
MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE,
TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS THE SECURITIES HAVE
BEEN QUALIFIED AND REGISTERED UNDER APPLICABLE STATE, FEDERAL, OR
OTHER SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION IS
NOT REQUIRED. TRANSFER OF THE SECURITIES REPRESENTED BY THIS
AGREEMENT MAY BE FURTHER SUBJECT TO THE RESTRICTIONS, TERMS AND
CONDITIONS SPECIFIED HEREIN.
TABLE OF CONTENTS

Page

ARTICLE I
DEFINITIONS
1
1.1 Terms ................................................................................................................................. 1
1.2 Construction of Certain References ................................................................................. 18
ARTICLE II
ORGANIZATIONAL MATTERS
19
2.1 Formation ......................................................................................................................... 19
2.2 Name ................................................................................................................................ 19
2.3 Term ................................................................................................................................. 19
2.4 Office and Agent .............................................................................................................. 20
2.5 Qualification in Other Jurisdictions ................................................................................. 20
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY
20
3.1 Purpose ............................................................................................................................. 20
3.2 Powers of the Company ................................................................................................... 20
3.3 Liability of Directors, Officers and Members .................................................................. 22
ARTICLE IV
CAPITAL CONTRIBUTIONS
22
4.1 Capitalization ................................................................................................................... 22
4.2 Return on Capital Contributions ...................................................................................... 22
4.3 Regulatory Capital Contributions .................................................................................... 23
4.4 Voluntary Capital Contributions ...................................................................................... 24
4.5 Non-Funding Members .................................................................................................... 25
4.6 Membership Interests ....................................................................................................... 27
4.7 Loans From Members ...................................................................................................... 27
4.8 Reserves ........................................................................................................................... 27
4.9 Ownership Limitations..................................................................................................... 28
4.10 Royalty Payments ............................................................................................................ 30
-i-
TABLE OF CONTENTS
(continued)
Page

ARTICLE V
ALLOCATIONS AND ELECTIONS
30
5.1 Allocations ....................................................................................................................... 30
5.2 Special Allocations .......................................................................................................... 30
5.3 Other Allocation Rules .................................................................................................... 31
5.4 Allocations for Income Tax Purposes .............................................................................. 32
ARTICLE VI
DISTRIBUTIONS
32
6.1 Distributions ..................................................................................................................... 32
6.2 Tax Distributions ............................................................................................................. 33
6.3 Return of Distributions .................................................................................................... 34
6.4 Limitation on Distributions .............................................................................................. 34
6.5 Withholding; Indemnification and Reimbursement by Member ..................................... 34
ARTICLE VII
MEMBERS
35
7.1 Limited Liability .............................................................................................................. 35
7.2 Members .......................................................................................................................... 35
7.3 Admission of New Members ........................................................................................... 35
7.4 Certain Confirmations ...................................................................................................... 35
7.5 Restricted Members ......................................................................................................... 35
7.6 Member Conduct ............................................................................................................. 38
ARTICLE VIII
MANAGEMENT OF THE COMPANY
38
8.1 Board of Directors............................................................................................................ 38
8.2 Committees of the Board ................................................................................................. 47
8.3 Founding Firms Advisory Committee ............................................................................. 47
8.4 Officers ............................................................................................................................ 48
8.5 Indemnification ................................................................................................................ 50
-ii-
TABLE OF CONTENTS
(continued)
Page

8.6 Insurance .......................................................................................................................... 52
ARTICLE IX
RIGHTS AND DUTIES OF MEMBERS
52
9.1 Meetings of Members ...................................................................................................... 52
9.2 Voting Rights ................................................................................................................... 53
9.3 Voting Trusts ................................................................................................................... 53
9.4 Registered Members ........................................................................................................ 53
9.5 Withdrawal ....................................................................................................................... 53
9.6 Authority .......................................................................................................................... 54
9.7 Outside Activities............................................................................................................. 54
9.8 NYSE Euronext Agreement ............................................................................................. 55
ARTICLE X
MEMBERSHIP INTERESTS
55
10.1 Membership Interests Generally ...................................................................................... 55
10.2 Authorization and Issuance of Interests ........................................................................... 55
10.3 Additional Interests .......................................................................................................... 56
10.4 Admission as Member ..................................................................................................... 56
10.5 Sanctioned Persons .......................................................................................................... 56
ARTICLE XI
TRANSFERS
56
11.1 Assignment of Interests by a Member; Admission of Members ..................................... 56
11.2 Transfer of Interests ......................................................................................................... 57
11.3 Drag-Along Rights ........................................................................................................... 61
11.4 Permitted Transfers .......................................................................................................... 63
11.5 Redemption of Interests ................................................................................................... 64
11.6 Initial Public Offering ...................................................................................................... 67
11.7 Prospective Transferees ................................................................................................... 67
11.8 Additional Requirements ................................................................................................. 67
-iii-
TABLE OF CONTENTS
(continued)
Page

ARTICLE XII
DISSOLUTION EVENTS AND TERMINATION OF INTERESTS
69
12.1 Dissolution ....................................................................................................................... 69
12.2 Liquidation ....................................................................................................................... 70
12.3 Final Statement ................................................................................................................ 71
12.4 Right to Continue Business of Company ......................................................................... 71
12.5 Certificates of Dissolution, Continuance and Cancellation ............................................. 71
ARTICLE XIII
BOOKS AND RECORDS; CERTAIN TAX MATTERS
71
13.1 Records ............................................................................................................................ 71
13.2 Delivery to Members and Inspection ............................................................................... 72
13.3 Tax Returns and Reports .................................................................................................. 73
13.4 Fiscal Year and Tax Year ................................................................................................ 73
13.5 Tax Matters Member........................................................................................................ 73
13.6 Tax Elections ................................................................................................................... 74
13.7 Tax Status......................................................................................................................... 74
13.8 Restrictions on Foreign Operations ................................................................................. 74
ARTICLE XIV
CONFIDENTIALITY
75
14.1 Confidentiality ................................................................................................................. 75
14.2 Disclosure of Participation ............................................................................................... 79
ARTICLE XV
DISPUTE RESOLUTION
79
15.1 Dispute Resolution ........................................................................................................... 79
ARTICLE XVI
MISCELLANEOUS
82
16.1 Regulatory Approvals and Compliance ........................................................................... 82
16.2 Incentive Structure ........................................................................................................... 83
-iv-
TABLE OF CONTENTS
(continued)
Page

16.3 Company Payments and Available Cash ......................................................................... 83
16.4 Investment Banking ......................................................................................................... 83
16.5 Survival of Obligations .................................................................................................... 83
16.6 Notice ............................................................................................................................... 83
16.7 Binding Effect .................................................................................................................. 84
16.8 No Third Party Beneficiaries ........................................................................................... 84
16.9 Merger of Prior Agreements and Understandings ........................................................... 85
16.10 Amendment ...................................................................................................................... 85
16.11 Waiver .............................................................................................................................. 85
16.12 Severability ...................................................................................................................... 85
16.13 No Assignment................................................................................................................. 86
16.14 Governing Law ................................................................................................................ 86
16.15 Counterparts ..................................................................................................................... 86
16.16 Other States ...................................................................................................................... 86
16.17 No Effect Upon Lender Relationship .............................................................................. 86
16.18 Remedies Cumulative ...................................................................................................... 86
16.19 Guaranty ........................................................................................................................... 87
-v-
TABLE OF CONTENTS
(continued)

Schedules
Schedule A –Members’ Schedule
Schedule 8.1(d)(i) – Directors Designated by NYSE MKT
Schedule 8.1(d)(ii) – Directors Designated by Founding Firms
Schedule 8.1(i)(v) – Board Decisions Requiring Supermajority Vote
Schedule 8.3(b) – Representatives to the Founding Firm Advisory Committee

Exhibits
Exhibit A – Form of Supplement

-vi-
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
NYSE Amex Options LLC,
a Delaware Limited Liability Company

This Amended and Restated Limited Liability Company Agreement (this “Agreement”)
of NYSE Amex Options LLC, a Delaware limited liability company (the “Company”), is entered
into pursuant to and in accordance with the Act (as defined herein) and shall be made as of this
14th day of May, 2014, by and among those Persons (as defined herein) identified as Members
(as defined herein) on Schedule A and NYSE Euronext (as defined herein).
WHEREAS, the Company was formed on May 13, 2011 as a limited liability company
pursuant to the Act as described in Section 2.1;
WHEREAS, on June 29, 2011 (the “Initial Effective Date”), the Company issued
Common Interests and Preferred Interests to the Initial Members (each capitalized term as
defined herein), and the Initial Members, in consideration for the issuance, made contributions to
the Company as specified in an amended and restated contribution agreement dated as of
February 22, 2011 by and among NYSE Euronext, the Company and the Initial Members (the
“Contribution Agreement”);
WHEREAS, on September 19, 2011, NYSE Market (DE), Inc. (formerly known as
NYSE Market, Inc.), a Delaware corporation (“NYSE Market”), became a Member in
conjunction with its purchase of certain Common Interests; and
WHEREAS, the Members and NYSE Euronext desire to enter into this Agreement in
order to specify their respective rights and duties relating to the Company on the terms provided
herein.
NOW, THEREFORE, in consideration of the agreements and covenants contained
herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Terms. When used in this Agreement, the following terms shall have the
meanings specified below (all terms used in this Agreement that are not defined in this Article I
shall have the meanings specified elsewhere in this Agreement):
“19.9% Maximum Percentage” has the meaning specified in Section 4.9(a).
“AAA” has the meaning specified in Section 15.1(b).
“AAA Rules” has the meaning specified in Section 15.1(b).
1
“Act” means the Delaware Limited Liability Company Act, 6 Del. C. §18-101, et seq., as
may be amended from time to time, or any successor federal statute then in effect.
“Advancement of Expenses” has the meaning specified in Section 8.5(d).
“Advisory Committee Member” has the meaning specified in Section 8.3(a).
“Affiliate” means, with respect to any Person, any other Person directly or indirectly,
through one or more intermediaries, controlling, controlled by, or under common control with
such Person. The term “control,” as used in this definition of “Affiliate” means the possession,
directly or indirectly, of the power to direct or cause the direction of the management or policies
of such Person, whether through the ownership of voting securities, through the right or power to
appoint majority of the board of directors, by contract or otherwise, and “controlled by” and
“under common control” have corresponding meanings.
“Aggregate Class A Economic Allocation” means at any time, the entitlement to
allocations of Net Profits and Net Losses and to Distributions represented by the Class A
Common Interests in the aggregate as a percentage of all such entitlements represented by all
Common Interests.
“Aggregate Class A Voting Allocation” means at any time, the entitlement to vote
represented by the Class A Common Interests in the aggregate as a percentage of all such
entitlements represented by all Common Interests.
“Aggregate Class B Economic Allocation” means at any time, the entitlement to
allocations of Net Profits and Net Losses and to Distributions represented by the Class B
Common Interests in the aggregate as a percentage of all such entitlements represented by all
Common Interests. The Aggregate Class B Economic Allocation shall at all times be equal to
one hundred percent (100%) minus the Aggregate Class A Economic Allocation.
“Aggregate Class B Voting Allocation” means at any time, the entitlement to vote
represented by the Class B Common Interests in the aggregate as a percentage of all such
entitlements represented by all Common Interests. The Aggregate Class B Voting Allocation
shall at all times be equal to one hundred percent (100%) minus the Aggregate Class A Voting
Allocation.
“Agreement” has the meaning specified in the introduction to this Agreement.
“Already Pending Proceeding” has the meaning specified in Section 15.1(b)(iv).
“Alternate Maximum Percentage” has the meaning specified in Section 4.9(a).
“Annual Budget” means, with respect to any calendar year period, the budget for the
operations of the Company during such period, as determined by Supermajority Vote of the
Board.
“Approved Sale” has the meaning specified in Section 11.3(a).
2
“Associated Businesses” has the meaning specified in Section 9.7(a)(i).
“Available Cash” means, with respect to a Distribution pursuant to Section 6.1, cash
(excluding cash in the Redemption Reserve) held by the Company at the time of such
Distribution that both (i) is not required for the operations of the Company based on the Annual
Budget of the Company for such year, and (ii) the Board determines in good faith is not required
for (A) the payment of liabilities or expenses of the Company or (B) the setting aside of reserves
to meet the anticipated cash needs of the Company.
“BAML” means Banc of America Strategic Investments Corporation, a corporation
organized under the laws of the State of Delaware.
“Bankruptcy” means, with respect to any Person, such Person: (1) is dissolved (other
than pursuant to a consolidation, amalgamation or merger); (2) becomes insolvent or is unable to
pay its debts or fails or admits in writing its inability generally to pay its debts as they become
due; (3) makes a general assignment, arrangement or composition with or for the benefit of its
creditors; (4)(A) institutes or has instituted against it, by a regulator, supervisor or any similar
official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the
jurisdiction of its incorporation or organization or the jurisdiction of its head or home office, a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency Law or other similar Law affecting creditors’ rights, or a petition is
presented for its winding-up or liquidation by it or such regulator, supervisor or similar official,
or (B) has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or
any other relief under any bankruptcy or insolvency Law or other similar Law affecting
creditors’ rights, or a petition is presented for its winding-up or liquidation, and such proceeding
or petition is instituted or presented by a person or entity not described in clause (A) above and
either (I) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or
the making of an order for its winding-up or liquidation or (II) is not dismissed, discharged,
stayed or restrained, in each case within thirty (30) days of the institution or presentation thereof;
(5) has a resolution passed for its winding-up, official management or liquidation (other than
pursuant to a consolidation, amalgamation or merger); (6) seeks or becomes subject to the
appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian
or other similar official for it or for all or substantially all its assets; (7) has a secured party take
possession of all or substantially all its assets or has a distress, execution, attachment,
sequestration or other legal process levied, enforced or sued on or against all or substantially all
its assets and such secured party maintains possession, or any such process is not dismissed,
discharged, stayed or restrained, in each case within thirty (30) days thereafter; (8) causes or is
subject to any event with respect to it which, under the applicable Laws of any jurisdiction, has
an analogous effect to any of the events specified in clauses (1) to (7) above (inclusive); or (9)
takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the foregoing acts.
“Barclays” means Barclays Electronic Commerce Holdings Inc., a corporation organized
under the laws of the State of Delaware.
3