Philadelphia Stock Exchange Defeats Legal Effort To Prevent Member And Owner Votes On Demutualization

The Philadelphia Stock Exchange, Inc. (PHLX), which has been pursuing a plan of "demutualization" - under which it will convert from a membership corporation to stock form - announced today that it has defeated a legal effort by a member and a member organization to prevent the votes of the equitable titleholders or owners of PHLX memberships (seats) and PHLX members on the demutualization plan. The special meetings at which these votes are to be conducted are scheduled for November 18 and November 25, respectively.

Following hearings last week, the Honorable Esther R. Sylvester of the Philadelphia County Court of Common Pleas denied a request for a preliminary injunction to prevent the votes.

Exchange Chairman and Chief Executive Officer Meyer S. ("Sandy") Frucher stated: "The Exchange's success in court today was a victory not just for the Exchange, but for the entire community of members and owners. This will allow these constituencies to express - pro or con - their views on whether the demutualization plan is the right course." Frucher also noted that the votes are just interim steps toward the completion of the demutualization plan, essential components of which must still be approved by the Securities and Exchange Commission (SEC) following a public notice and comment period. The Exchange expects that SEC approval could be forthcoming during the first quarter of 2004.

The Philadelphia Stock Exchange, the nation's first stock exchange, was founded in 1790. The PHLX trades more than 2,000 stocks, nearly 1,000 listed equity options, 14 sectors index options and currency pairs. For more information about the PHLX and its products, visit www.phlx.com.