Exercise right eligibility terminates,
CBOE to seek dismissal of exercise right litigation by former CBOT members
CHICAGO, January 16, 2008 – Today, the Chicago Board Options Exchange (CBOE) announced the following:
Exercise Right Eligibility Terminates On January 15, 2008, the Securities and Exchange Commission (SEC) unanimously approved CBOE’s rule interpretation that no person qualifies to become or remain a CBOE exerciser member following the July 2007 acquisition of the Chicago Board of Trade (CBOT) by Chicago Mercantile Exchange Holdings, Inc. (CME).
CBOE to Seek Dismissal of Delaware LitigationBased on the SEC’s approval order and the SEC’s exclusive jurisdiction over membership issues, CBOE will seek dismissal of the exercise right litigation in Delaware on the grounds that no state law claims survive the SEC’s approval order and that former exerciser members would not be entitled to participate in CBOE’s demutualization.
“We are extremely pleased by the SEC’s approval of CBOE’s position regarding exercise right eligibility, which should dispose of the claims in the class action in Delaware court. CBOE applauds the Commission for addressing the exercise right issues with certainty, clarity, and specificity. We are especially gratified that the order specifically confirms our legal position regarding the impact on exercise right eligibility of the acquisition of CBOT by CME. We believe this places us in a very strong position to achieve a favorable resolution of this matter, once and for all, in Delaware court,” said CBOE Chairman and CEO William J. Brodsky.
In its order, the SEC finds that CBOE’s proposal “interprets CBOE’s rules fairly and reasonably” in light of the CME acquisition of CBOT and that the rule interpretation is consistent with the requirements of the Exchange Act, the SEC’s rules, and CBOE’s own rules, including the provision of its charter that created the exercise right. In particular, the SEC approved CBOE’s interpretation that former CBOT members, after the CME acquisition, no longer qualify as CBOT members within the meaning of that charter provision.
CBOE is currently developing a new access plan that will address present temporary CBOE members who are former exerciser members. Those temporary members will continue in their present status until the new plan is approved.
CBOE, the largest U.S. options exchange and the creator of listed options, is regulated by the Securities and Exchange Commission (SEC). For additional information about the CBOE and its products, access the CBOE website at: www.cboe.com. CBOE Media Contact:Carol Kennedy(312) 786-7323kennedyc@cboe.comCBOE and Chicago Board Options Exchange are registered trademarks of Chicago Board Options Exchange, Incorporated.This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.In connection with the proposed restructuring transaction, CBOE Holdings, Inc. (“CBOE Holdings”) has filed certain relevant materials with the United States Securities and Exchange Commission (SEC), including a registration statement on Form S-4. Members are encouraged to read the registration statement, including the proxy statement/prospectus that are a part of the registration statement, because it contains important information about the proposed transaction. Members are able to obtain a free copy of the proxy statement/prospectus, as well as the other filings containing information about CBOE Holdings and the Chicago Board Options Exchange, Incorporated (“CBOE”), without charge, at the SEC’s Web site, http://www.sec.gov, and the companies’ website, www.CBOE.com. In addition, CBOE members may obtain free copies of the proxy statement/prospectus and other documents filed by CBOE Holdings or the CBOE from CBOE Holdings by directing a request to the Office of the Secretary, CBOE Holdings, Inc., 400 South LaSalle Street, Chicago, Illinois 60605.CBOE Holdings, the CBOE and their respective directors, executive officers and other employees may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction. Information about the directors and executive officers of CBOE Holdings and of the CBOE is available in the prospectus/proxy statement.
