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Under the terms of the agreement, as the CBOT® proceeds with its restructuring plan, its 1,402 full memberships will be converted into three different types of shares: equity in CBOT® ("A" shares), trading rights for CBOT® products ("B-1" shares) and the exercise right ("C" shares). All three types of shares must be held together in order to exercise the right to become a CBOE member.
The agreement, which was approved by the Boards of Directors of both exchanges, is subject to a CBOE membership vote, approval by the CBOT® membership as part of the restructuring, and is subject to federal regulatory approval.
"We feel this is a fair and forward-looking agreement," said CBOE Chairman and Chief Executive Officer William J. Brodsky. "Not only does this provide a negotiated resolution, but it also lays the foundation for our two institutions to work together toward common goals in the future."
CBOT® Chairman Nickolas J. Neubauer said, "Maintaining a constructive and positive dialogue on this issue has served both exchanges well, and when combined with our earlier announcement on single stock futures, sends a message to the industry that by working together, Chicago's financial exchanges can be a formidable force. The CBOT® now can move forward with its restructuring strategy."
"For the first time in 28 years, the CBOE will have the ability to affect the number of exercise rights through the acquisition of shares," said CBOE Vice Chairman Mark F. Duffy. "Additionally, we have clarified the rights and responsibilities of exercising members."
CBOT® President and CEO David J. Vitale added, "While reaching agreement is a significant achievement, perhaps equally important is the mutual respect and goodwill that has resulted from the negotiation process that took place between the two exchanges. It will allow us to work together on opportunities that will benefit our respective members and markets."
CBOE, the world's largest options marketplace and 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 site on the World Wide Web at http://www.cboe.com
The Chicago Board of Trade provides a diverse mix of more than 60 futures and options contracts for commodity, financial and equity products via both open outcry and electronic trading platforms. For more information on the CBOT®'s markets and products, go to the CBOT®" web site at www.cbot.com.
