CBOE Board Approves Purchase Offer For CBOT Exercise Rights

On March 2, 2004, the CBOE Board of Directors approved a proposal to initiate a purchase offer for a significant number of CBOT exercise rights. The CBOE membership will be asked to approve this plan in a vote to be held in April.

If the plan is approved by its membership, CBOE will offer to purchase up to 1,000 exercise rights from CBOT Full Members for $100,000 each.

"The opportunity to purchase exercise rights marks an important moment for the future of our exchanges," said CBOE Chairman and CEO William J. Brodsky. "The exercise right impacts us today in ways not contemplated when it was formed at CBOE's inception nearly 31 years ago. In effect, CBOE and CBOT are 'joined at the hip'. At a time when our respective marketplaces demand great flexibility and agility, a reduction in the number of exercise rights will enable us to more readily pursue independent strategic paths."

"The ability to retire exercise rights by purchasing them from CBOT members who wish to sell them can greatly enhance the autonomy needed by each exchange to succeed in very different trading arenas," said CBOE Vice Chairman Ed Tilly.

Since CBOE's inception in 1973, the exercise right has entitled any Full Member of the Chicago Board of Trade to all rights and privileges of CBOE membership. In February 2004, the Chicago Board of Trade membership approved a rule change to allow the transfer of exercise rights to occur, allowing CBOE to move forward with this transaction.

CBOE, regulated by the Securities and Exchange Commission (SEC), is the creator of listed options, and the world's largest options marketplace. For additional information about the CBOE and its products, access the CBOE website at http://www.cboe.com/.