Chicago Stock Exchange Board Of Governors Approves Demutualization Plan - Members To Vote On Plan In October

The Chicago Stock Exchange's (CHX) board voted unanimously yesterday in favor of presenting a demutualization plan to the Exchange's members. A CHX member vote on the plan will be scheduled to take place in October. Any decision by the CHX's members to demutualize could not take effect until approved by the Securities and Exchange Commission. In anticipation of the member vote and the demutualization transaction, the Exchange's board also voted to suspend the CHX seat market until uniform disclosure documents regarding the proposed transaction are disseminated to CHX seat owners.

In this demutualization transaction, the CHX will change its organizational structure from a not-for-profit, non-stock corporation owned by its members to become a wholly-owned subsidiary of a holding company, CHX Holdings, Inc., which is to be organized as a for-profit, stock corporation owned by its stockholders. The members of CHX at the time of the demutualization transaction will receive shares of common stock of the new holding company in exchange for their CHX memberships, and thus will become the stockholders of the new holding company. Those members who are qualified to trade on the Exchange at the time of the demutualization will receive trading permits that give them continued access to the Exchange's trading facilities.

Valerie Jarrett, CHX Chairman, said, "The Board believes that converting to a for-profit, stock corporation will give the CHX the flexibility to attract strategic partnerships that will help grow the volume of our business."

Dave Herron, CHX's Chief Executive Officer, commented, "Today is a historic day for the Chicago Stock Exchange. The CHX has been serving the investing public for over 120 years and, over the years, we have changed our business model to adapt to market conditions and business opportunities. Today's vote for demutualization is another important step in our evolution."

Andy Davis, CHX Vice-Chairman, said, "This vote is an important first step in implementing our strategic plan to fully automate and remain a robust and relevant competitor."

The Chicago Stock Exchange was founded May 15, 1882. The CHX is a strong force for competition to all U.S. markets. The CHX trades more than 3,500 NYSE, AMEX, NASDAQ and CHX-exclusive issues.