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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2016
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or
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Delaware
(State or other jurisdiction of
incorporation or organization)
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20-5446972
(I.R.S. Employer
Identification Number)
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400 South LaSalle Street
Chicago, Illinois
(Address of principal executive offices)
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60605
(Zip Code)
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Title of Each Class
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Name of Exchange on Which Registered
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Common Stock,
par value $0.01 per share
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NASDAQ Global Select Market
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
¨
(Do not check if a
smaller reporting company)
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Smaller reporting company
o
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Documents
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Form 10-K Reference
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Portions of the Company's Proxy Statement for the 2017 Annual Meeting of Stockholders
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Part III
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Page
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"CBOE Holdings," "we," "us," "our" or "the Company" refers to CBOE Holdings, Inc. and its subsidiaries.
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"CBOE" refers to Chicago Board Options Exchange, Incorporated, a wholly-owned subsidiary of CBOE Holdings, Inc.
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"C2" refers to C2 Options Exchange, Incorporated, a wholly-owned subsidiary of CBOE Holdings, Inc.
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"CFE" refers to CBOE Futures Exchange, LLC, a wholly-owned subsidiary of CBOE Holdings, Inc.
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"CFTC" refers to the U.S. Commodity Futures Trading Commission.
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"Consent Order" refers to the consent order that CBOE and C2 entered into with the SEC on June 11, 2013.
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"FASB" refers to the Financial Accounting Standards Board.
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"GAAP" refers to Generally Accepted Accounting Principles in the U.S.
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"Our exchanges" refers to CBOE, C2 and CFE.
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"SEC" refers to the U.S. Securities and Exchange Commission.
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"SPX" refers to our S&P 500 Index exchange-traded options products.
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"TPH" refers to either a Trading Permit Holder or Trading Privilege Holder.
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"VIX" refers to the CBOE Volatility Index methodology.
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the loss of our right to exclusively list and trade certain index options and futures products;
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economic, political and market conditions;
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compliance with legal and regulatory obligations, including our obligations under the Consent Order;
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increasing price competition in our industry;
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decreases in trading volumes or a shift in the mix of products traded on our exchanges;
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legislative or regulatory changes;
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increasing competition by foreign and domestic entities;
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our dependence on third party service providers;
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our index providers' ability to maintain the quality and integrity of their indexes and to perform under our agreements;
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our ability to operate our business without violating the intellectual property rights of others and the costs associated with protecting our intellectual property rights;
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our ability to accommodate trading volume and transaction traffic, including significant increases, without failure or degradation of performance of our systems;
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our ability to protect our systems and communication networks from security risks, including cyber-attacks;
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the accuracy of our estimates and expectations;
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our ability to maintain access fee revenues;
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our ability to meet our compliance obligations, including managing potential conflicts between our regulatory responsibilities and our for-profit status;
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the ability of our compliance and risk management methods to effectively monitor and manage our risks;
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our ability to attract and retain skilled management and other personnel;
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our ability to manage our growth and strategic acquisitions or alliances effectively;
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restrictions imposed by our debt obligations;
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the satisfaction of the conditions precedent to the consummation of our proposed acquisition of Bats Global Markets, Inc. (“Bats”), including, without limitation, the receipt of regulatory approvals on the terms desired or anticipated;
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unanticipated difficulties or expenditures relating to the proposed transaction, including, without limitation, difficulties that result in the failure to realize expected synergies, efficiencies and cost savings from the proposed transaction within the expected time period (if at all), whether in connection with integration, combining trading platforms, broadening distribution of product offerings or otherwise;
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our ability to maintain an investment grade credit rating;
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risks relating to the value of our shares to be issued in the proposed transaction;
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disruptions of our and Bats’ current plans, operations and relationships with market participants caused by the announcement and pendency of the proposed transaction; and
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potential difficulties in our and Bats’ ability to retain employees as a result of the announcement and pendency of the proposed transaction.
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Annual Contract Volume
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2016
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2015
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2014
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2013
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2012
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Equities
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364,373,339
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392,982,051
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488,580,906
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433,777,204
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494,289,301
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Indexes
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433,256,044
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408,281,695
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406,454,861
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372,647,443
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304,339,908
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Exchange-traded products
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326,740,299
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320,997,251
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379,742,163
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341,023,209
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311,792,122
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Total Options Volume
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1,124,369,682
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1,122,260,997
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1,274,777,930
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1,147,447,856
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1,110,421,331
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Futures
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60,176,526
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51,671,188
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50,615,435
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40,193,447
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23,892,931
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Total Contract Volume
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1,184,546,208
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1,173,932,185
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1,325,393,365
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1,187,641,303
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1,134,314,262
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Innovative Products and Services.
We have worked closely and collaboratively with market participants to introduce new products and services to meet the evolving needs of the derivatives industry, and plan to continue these efforts. Products we have developed include index options, options and futures on the VIX Index and other volatility indexes, short duration options, including Weeklys, FLexible EXchange Options ("FLEX options") and options strategy benchmark indexes.
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Strategic Relationships and Partnerships.
We have entered into licensing agreements with index providers under which we have rights to create volatility indexes and offer options and futures products on their indexes. We have also formed partnerships with key providers to develop new products and services. See "Strategic Relationships" and "Strategic Partnerships."
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Leading Brand, Reputation and Market Position.
CBOE, the largest U.S. options exchange, based on both contract volume and notional value, and one of the largest options exchanges in the world, is an options market leader. As the creator of listed options and other significant products in the listed options industry, including the VIX Index and VIX futures and options, CBOE is a leading brand name in the options and volatility space.
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Expand Customer Base.
We intend to continue our efforts to expand the use of our products domestically and internationally, by intensifying our business development efforts to target new retail investors and institutional investors, including pensions and endowments, and to inform them about how to trade our products, especially our proprietary products. We also intend to continue to offer investor education and wide educational resources for both retail and institutional customers through the CBOE Options Institute and through our comprehensive website, including through the annual CBOE Risk Management Conferences, now held in the U.S., Europe and Asia. Further, offering extended trading hours in our exclusive products is at the core of our international expansion effort. In addition to extended trading hours for VIX futures and SPX and VIX options, in 2016 we began overnight dissemination of values for the VIX Index. We opened an office in London and engaged a full-time consultant in Hong Kong in 2016 to further support our expanding international business development efforts.
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Develop Innovative Products that Leverage and Complement Core Products.
We intend to license and create proprietary intellectual property to develop proprietary products that meet the needs of the derivatives industry, through both strategic relationships and internally developed products, while continuing to diversify our product line across asset classes. In 2016, we continued to leverage partnerships with index providers to extend our product offering with products such as SPX Weeklys with Monday and Wednesday expirations and Flex Options with Asian and Cliquet style settlements. In addition, we launched new products on certain Frank Russell Company and FTSE International Limited (together, "FTSE Russell") indexes that are solely listed for trading on CBOE in the U.S.
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Offer Compelling Economic Model.
We have designed our fee schedule to provide benefits to market participants that concentrate their overall trading activity on CBOE, which we believe encourages market participants to increase their business with us. In our proprietary products, we offer discounts and incentives to certain participants based on relative volume and the use of selected strategies. In multiply-listed products, we offer incentive programs to attract customer order flow to help our market participants manage both the fixed and transaction-based costs of trading on CBOE. We regularly review the fee schedules for all of our exchanges to provide an industry-leading economic offering.
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Continue to Enhance Our Trading Systems.
We recognize that the opportunity to participate in the growth of the derivatives market will be driven in great part by the trading functionality and systems capabilities that an exchange offers to market participants. We intend to use our strong in-house development capabilities and continued investment to further enhance and develop the functionality and capacity of our trading systems. In 2015, we began in-house custom development of our next generation of trading technology, CBOE Vector, a new platform designed with the end-user in mind, using the latest hardware and software technology in order to provide enhanced agility, speed, connectivity and risk controls. However, the launch of CBOE Vector on CFE is suspended due to the pending Merger.
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Evaluate Strategic Opportunities that Leverage and Complement Core Business.
We evaluate strategic opportunities that we believe will enhance stockholder value. We specifically look for strategic opportunities beyond our current businesses that will capitalize on our core competencies and diversify our sources of revenue. We continue to form new alliances with various partners that leverage our strengths and enable us to diversify our
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Index Options.
We offer trading in options on several different broad-based market indexes, including the VIX Index, a proprietary index that we developed and that has become a widely recognized measure of equity market volatility. The index options we list include some of the most widely recognized measures of the U.S. equities market, as discussed below.
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Equity Options.
We offer trading in options on the stocks of over 3,100 corporations. The stocks underlying our individual equity options are listed on equity stock exchanges.
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Options on ETPs.
We offer trading in options on over 600 ETFs and ETNs based on various domestic and foreign market indexes, as well as on volatility, commodities, currencies and fixed income instruments.
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Futures.
We provide a marketplace for trading four futures products through CFE. CFE has focused on the trading of futures using the CBOE-created VIX methodology, but also provides trading in S&P 500 Variance futures.
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S&P 500 and S&P 100 Indexes.
We have the exclusive right to offer options contracts on the S&P 500 Index and the S&P 100 Index as a result of a licensing arrangement with S&P OPCO LLC ("S&P"). Our license with S&P is through December 31, 2033, with an exclusive license to trade options on the S&P 500 Index through December 31, 2032. We are also authorized to use the S&P 500 Index and S&P 100 Index for the creation of CBOE volatility indexes, such as the VIX Index, and tradable products on those volatility indexes.
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FTSE Russell Indexes.
Under our license agreement with FTSE Russell, CBOE has the exclusive right in the U.S. to offer options on more than two dozen FTSE Russell indexes, including the Russell 2000, FTSE GEIS (Global Equity Index Series), FTSE China 50, the Russell 1000, the Russell 1000 Value and the Russell 1000 Growth Indexes. We offer options on the Russell 2000 Index, Russell 1000, Russell 1000 Value and Russell 1000 Growth Indexes and in 2016 we launched trading options on the FTSE 100, FTSE China 50 and FTSE Emerging Indexes.
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MSCI.
We have the exclusive right in the U.S. to offer options on six of MSCI's indexes, including the MSCI EAFE and the MSCI Emerging Markets Indexes, as a result of a licensing arrangement with MSCI Inc. We offer options on the MSCI EAFE and the MSCI Emerging Markets Indexes and in 2016 we broadened distribution of data on these indexes through CBOE’s Market Data Express, LLC ("MDX") service.
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Dow Jones Industrial Average ("DJIA").
We have the exclusive right during standard U.S. trading hours to offer options contracts on the DJIA and certain other Dow Jones indexes through December 31, 2017 as a result of a licensing arrangement with S&P Dow Jones Indices, LLC. We are also authorized to use these indexes to create CBOE volatility indexes and trade options, futures and other products on these indexes.
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CBOE Vest.
In 2016, we made a majority investment in CBOE Vest, an investment manager focused on Target Outcome Investment strategies. CBOE Vest launched in 2016 three new mutual funds, CBOE Vest S&P 500 Buffer Protect Strategy Fund, CBOE Vest Defined Distribution Strategy Fund and CBOE Vest S&P 500 Enhanced Growth Strategy Fund.
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American Financial Exchange.
Environmental Financial Products, LLC and CBOE launched in 2015 the American Financial Exchange ("AFX"), an electronic marketplace for small and mid-sized banks to lend and borrow short-term funds. CBOE operates the web-accessible, electronic trade matching engine and also supports surveillance and membership services. In 2016, AFX launched a 30-day unsecured loan product and a new transaction-based interest rate benchmark, Ameribor.
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Eris.
In 2016, we made a minority equity investment in Eris, a U.S.-based futures exchange group offering swap futures as a capital-efficient alternative to over-the-counter ("OTC") swaps. CBOE and Eris plan to develop new product solutions and indexes across asset classes that are expected to address the impact of international regulatory reforms, including Basel III, European swap clearing and trading mandates, and margin for un-cleared swaps. The companies also plan to collaborate to enhance distribution of Eris Interest Rate Swap Futures and related market data.
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Curve Global.
We have a minority investment in CurveGlobal, a new interest rate derivatives venture of the LSEG and a number of major dealer banks. CurveGlobal, launched in 2016, offers trading in Short Term Interest Rate futures in Euribor and Short Sterling and Long Term Interest Rate futures in Bund, Bobl, Schatz and Gilts. The launch of CurveGlobal caters to banks and other market participants looking for more capital efficient ways to trade and hedge these products.
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Social Market Analytics.
We entered into an exclusive licensing agreement in 2016 with Social Market Analytics (“SMA”) to develop a series of sentiment-based strategy benchmark indexes. We launched in August 2016, the CBOE-SMA Large Cap Index, a sentiment-based strategy benchmark index that measures short-term market momentum based on SMA’s social media metrics.
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Market-Maker Trading Permit.
A market-maker trading permit entitles the holder to act as a market-maker who engages in trading our products either for its own account or for the account of his or her firm, but does not act as an agent representing orders for customers. Market-makers have quoting obligations in their appointed product classes. They are granted margin relief and must have a relationship with a clearing firm that will hold and guarantee their positions. The majority of trading permits in use on CBOE and C2 are used for market-making. There are additional classes of market-makers, namely Lead Market-Maker ("LMM") and Designated Primary Market-Maker ("DPM") that receive incentives for market-makers to provide competitive quotes. In addition, TPHs routing orders to CBOE may designate a Preferred Market-Maker.
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Floor Broker Trading Permit.
A floor broker trading permit entitles the holder, known as a floor broker, to act as an individual who represents orders on the CBOE trading floor as an agent. Floor brokers generally do not trade for their own account, although they may represent their firms' proprietary account.
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Electronic Access Permit ("EAP").
An EAP is a trading permit used by TPHs that need a separate access permit for a specific business function and is the most general type of access permit. EAP holders may be registered for one of the following: clearing TPHs; TPHs approved to transact business with the public; proprietary TPHs; and order service firms.
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CBOE utilizes various matching algorithms in different listed options classes, with different combinations of customer priority, participation rights and pro-rata, modified pro-rata or price-time depending on the product.
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C2's matching algorithm is pro-rata for all options classes.
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CFE utilizes either a price-time priority algorithm or a price-time priority algorithm with participation rights for all futures.
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Offering a fee schedule that both attracts order flow and provides incentives to liquidity providers;
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Providing advanced technology that offers broad functionality, low latency, fast execution, ease of use, scalability, reliability and security;
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Offering participants access to a broad array of products and services, including proprietary products;
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Offering market participants an efficient, transparent and liquid marketplace for trading options using our electronic trading system, CBOE Command, in either a hybrid (CBOE) or fully electronic (C2, CFE) market model;
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Offering customers a deep, liquid market with opportunities for price improvement;
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Facilitating payment for order flow through the administration of marketing fees;
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Offering market participants potential participation rights for order flow that they direct or cause to be directed to our exchanges;
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Maintaining close relationships and open communication channels with market participants; and
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Providing brokers and their customers with a comprehensive source of information on options as well as extensive options education.
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surveillance designed to detect violations of exchange trading rules;
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surveillance designed to detect violations of other SEC and CFTC rules;
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the further investigation of matters deemed to be problematic;
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the investigation of complaints about possible rule violations brought by customers, TPHs or other SROs; and
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the examination of TPHs for compliance with rules such as those related to net capital, books and records, market access and other matters related to the TPHs' exchange business functions.
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Name
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Age
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Position
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Edward T. Tilly
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53
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Chief Executive Officer
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Edward L. Provost
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64
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President and Chief Operating Officer
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Alan J. Dean
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62
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Executive Vice President, Chief Financial Officer and Treasurer
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Joanne Moffic-Silver
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64
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Executive Vice President, General Counsel and Corporate Secretary
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Gerald T. O'Connell
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65
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Executive Vice President and Chief Information Officer
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David S. Reynolds
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63
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Vice President and Chief Accounting Officer
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broad trends in business and finance;
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concerns over wavering institutional or retail confidence levels;
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changes in government fiscal and monetary policy and foreign currency exchange rates;
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the availability of short-term and long-term funding and capital;
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the availability of alternative investment opportunities;
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changes in the level of trading activity in underlying instruments;
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changes and volatility in the prices of securities;
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the level and volatility of interest rates;
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unforeseen market closures or other disruptions in trading; and
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concerns about terrorism and war.
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heightened capital requirements;
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regulatory or legislative actions;
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reduced access to capital required to fund trading activities; or
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significant market disruptions.
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respond more quickly to competitive pressures;
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develop products that compete with our products or are preferred by our customers;
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develop and expand their technology and service offerings more efficiently;
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provide better, more user-friendly and more reliable technology;
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take greater advantage of acquisitions, alliances and other opportunities;
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market, promote, bundle and sell their products and services more effectively;
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leverage existing relationships with customers and alliance partners more effectively or exploit brand names to market and sell their services; and
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exploit regulatory disparities between traditional, regulated exchanges and alternative markets, including over-the-counter markets, that benefit from a reduced regulatory burden and lower-cost business model.
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OCC is the sole provider of clearing on all of our exchanges. If it were unable to perform clearing services, or its clearing members were unable or unwilling to clear through OCC, transactions would likely not occur on our markets or there may be delays.
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OPRA, UTP Securities Information Processor and the CTA consolidate market information such as last sale reports and quotations. If any of them were unable to provide this information for a sustained period of time, we may be unable to offer trading on our options markets.
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We are heavily dependent on technology for our markets, including our data center, which is housed by a third party, and certain communications and networking products and services. If this technology is unavailable, and cannot be replaced in a short time period, we may be unable to operate our markets.
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FINRA and NFA provide regulatory services for our options and futures exchanges, respectively, while we retain regulatory responsibilities for such services. If FINRA or NFA stopped providing services, or provided inadequate services, we may be subject to action by the SEC or CFTC, or may have limitations placed upon our markets.
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unanticipated disruption in service to our participants;
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failures or delays during peak trading times or times of unusual market volatility;
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slower response times and delays in trade execution and processing;
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incomplete or inaccurate accounting, recording or processing of trades; and
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distribution of inaccurate or untimely market data to participants who rely on this data in their trading activity.
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a loss in transaction or other fees due to the inability to provide services for a time;
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requests by market participants or others that we reimburse them for financial loss, either within the constraints of the limited liability provisions of our exchanges' rules or in excess of those amounts;
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trading to diminish on our exchanges due to dissatisfaction with the platform; and
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one or more of our regulators to investigate or take enforcement action against us.
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prohibiting stockholders from acting by written consent;
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requiring advance notice of director nominations and of business to be brought before a meeting of stockholders; and
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limiting the persons who may call special stockholders' meetings.
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restrict any person from voting or causing the voting of shares of stock representing more than 20% of our outstanding voting capital stock; and
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restrict any person from beneficially owning shares of stock representing more than 20% of the outstanding shares of our capital stock.
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we may be required, under certain circumstances, to pay Bats a termination fee of $110 million or reimburse Bats’ expenses up to $10 million under the Merger Agreement;
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we will be required to pay certain costs relating to the Merger, whether or not the Merger is completed, such as legal, accounting, financial advisory and printing fees;
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under the Merger Agreement, we are subject to certain restrictions on the conduct of our business prior to completing the Merger that may adversely affect our ability to execute certain of our business strategies; and
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matters relating to the Merger may require substantial commitments of time and resources by our management, which could otherwise have been devoted to other opportunities that may have been beneficial to us as an independent company and such commitments may impact future earnings of the combined company.
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the impairment of our ability to attract, retain and motivate our employees, including key personnel;
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the diversion of significant management time and resources towards the completion of the Merger;
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difficulties maintaining relationships with customers and other business partners;
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delays or deferments of certain business decisions by our customers and other business partners;
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the inability to pursue alternative business opportunities or make appropriate changes to our business because of requirements in the Merger Agreement that we conduct our business in the ordinary course of business consistent with past practice and not engage in certain kinds of transactions prior to the completion of the Merger;
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litigation relating to the Merger and the costs related thereto; and
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the incurrence of significant costs, expenses and fees for professional services and other transaction costs in connection with the Merger.
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unanticipated issues in integrating information technology, communications and other systems;
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unforeseen expenses or delays associated with the integration or the Merger;
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managing a significantly larger company;
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the potential diversion of management focus and resources from other strategic opportunities and from operational matters, and potential disruption associated with the Merger;
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maintaining employee morale and retaining key management and other key employees;
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integrating two unique business cultures, which may prove to be incompatible;
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the possibility of faulty assumptions underlying expectations regarding the integration process and expense synergies;
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consolidating corporate and administrative infrastructures and eliminating duplicative operations;
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coordinating geographically separate organizations;
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changes in applicable laws and regulations;
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managing costs or inefficiencies associated with integrating the operations of the combined company; and
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making any necessary modifications to internal financial control standards to comply with the Sarbanes Oxley Act of 2002 and the rules and regulations promulgated thereunder.
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Price Range
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Cash
Dividends Declared
per Share
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Calendar Period
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High
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Low
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|||||||
2015
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First Quarter
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$
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68.00
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$
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56.57
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$
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0.21
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Second Quarter
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59.64
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55.04
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0.21
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Third Quarter
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67.22
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57.41
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0.23
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Fourth Quarter
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72.53
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63.65
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0.23
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2016
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||||||
First Quarter
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67.41
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58.43
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0.23
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Second Quarter
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66.95
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61.22
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0.23
|
|
|||
Third Quarter
|
71.05
|
|
|
64.62
|
|
|
0.25
|
|
|||
Fourth Quarter
|
77.29
|
|
|
61.58
|
|
|
0.25
|
|
|||
2017
|
|
|
|
|
|
||||||
Through February 16, 2017 (1)
|
80.47
|
|
|
72.54
|
|
|
0.25
|
|
|
12/2011
|
12/2012
|
12/2013
|
12/2014
|
12/2015
|
12/2016
|
||||||
CBOE Holdings, Inc.
|
100
|
|
119.10
|
|
215.30
|
|
266.60
|
|
276.63
|
|
319.56
|
|
S&P Midcap 400
|
100
|
|
117.88
|
|
157.37
|
|
172.74
|
|
168.98
|
|
204.03
|
|
Peer Group
|
100
|
|
108.45
|
|
184.46
|
|
205.09
|
|
231.94
|
|
282.72
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||||||
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total operating revenues
|
$
|
656,946
|
|
|
$
|
634,545
|
|
|
$
|
617,225
|
|
|
$
|
572,050
|
|
|
$
|
512,338
|
|
Total operating expenses
|
358,746
|
|
|
314,617
|
|
|
303,424
|
|
|
286,236
|
|
|
268,241
|
|
|||||
Operating income
|
298,200
|
|
|
319,928
|
|
|
313,801
|
|
|
285,814
|
|
|
244,097
|
|
|||||
Total other income/(expense)
|
8,404
|
|
|
4,096
|
|
|
(4,104
|
)
|
|
(2,158
|
)
|
|
(1,546
|
)
|
|||||
Income before income taxes
|
306,604
|
|
|
324,024
|
|
|
309,697
|
|
|
283,656
|
|
|
242,551
|
|
|||||
Income tax provision
|
120,884
|
|
|
119,001
|
|
|
119,983
|
|
|
107,657
|
|
|
85,156
|
|
|||||
Net income
|
$
|
185,720
|
|
|
$
|
205,023
|
|
|
$
|
189,714
|
|
|
$
|
175,999
|
|
|
$
|
157,395
|
|
Net income allocated to common stockholders
|
$
|
184,945
|
|
|
$
|
204,125
|
|
|
$
|
188,392
|
|
|
$
|
173,863
|
|
|
$
|
155,254
|
|
Net income per share allocated to common stockholders
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
2.27
|
|
|
$
|
2.46
|
|
|
$
|
2.21
|
|
|
$
|
1.99
|
|
|
$
|
1.78
|
|
Diluted
|
2.27
|
|
|
2.46
|
|
|
2.21
|
|
|
1.99
|
|
|
1.78
|
|
|||||
Cash dividends declared per share (1) (2)
|
0.96
|
|
|
0.88
|
|
|
0.78
|
|
|
1.16
|
|
|
1.29
|
|
|||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
476,615
|
|
|
$
|
384,788
|
|
|
$
|
383,901
|
|
|
$
|
441,589
|
|
|
$
|
338,858
|
|
Total liabilities
|
146,069
|
|
|
125,143
|
|
|
133,834
|
|
|
157,072
|
|
|
99,736
|
|
|||||
Redeemable noncontroling interests
|
12,600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total stockholders' equity
|
317,946
|
|
|
259,645
|
|
|
250,067
|
|
|
284,517
|
|
|
239,122
|
|
|||||
Average daily volume by product (3)
|
|
|
|
|
|
|
|
|
|
||||||||||
Equities
|
1,446
|
|
|
1,559
|
|
|
1,939
|
|
|
1,721
|
|
|
1,977
|
|
|||||
Indexes
|
1,719
|
|
|
1,620
|
|
|
1,613
|
|
|
1,479
|
|
|
1,217
|
|
|||||
Exchange-traded products
|
1,297
|
|
|
1,274
|
|
|
1,507
|
|
|
1,353
|
|
|
1,247
|
|
|||||
Total options average daily volume
|
4,462
|
|
|
4,453
|
|
|
5,059
|
|
|
4,553
|
|
|
4,441
|
|
|||||
Futures
|
239
|
|
|
205
|
|
|
201
|
|
|
159
|
|
|
96
|
|
|||||
Total average daily volume
|
4,701
|
|
|
4,658
|
|
|
5,260
|
|
|
4,712
|
|
|
4,537
|
|
(1)
|
On December 11, 2012, the Company's board of directors declared a special cash dividend of $0.75 per share. This was in addition to the quarterly cash dividends which aggregated $0.54 per share for the year ended December 31, 2012.
|
(2)
|
On December 10, 2013, the Company's board of directors declared a special cash dividend of $0.50 per share. This was in addition to the quarterly cash dividends which aggregated $0.66 per share for the year ended December 31, 2013.
|
(3)
|
Average daily volume equals the total contracts traded during the period divided by the number of trading days in the period.
|
•
|
On September 25, 2016, CBOE Holdings and Bats entered into the Merger Agreement. The completion of the Merger is subject to certain conditions, including, among others, receipt of certain regulatory approvals. The Merger is expected to close on February 28, 2017. For more information, see "Business—Pending Merger" above.
|
•
|
In connection with entering into the Merger Agreement, we entered into a commitment letter relating to a $1.65 billion senior unsecured 364-day bridge loan facility. In lieu of entering into the bridge loan facility, CBOE Holdings entered into a term loan agreement and completed a notes offering, securing $1.65 billion to finance the cash portion of its pending acquisition of Bats as well as the repayment of Bats' existing indebtedness.
|
•
|
On December 15, 2016, we entered into a $1.0 billion senior unsecured delayed draw term loan facility and on January 12, 2017, we issued $650 million aggregate principal amount of our 3.650% Senior Notes due 2027.
|
•
|
On December 15, 2016, we entered into a $150 million revolving credit facility to be used for working capital and other general corporate purposes.
|
•
|
Transaction fees accounted for
70.5%
,
71.9%
and
70.9%
of total operating revenues for the years ended
December 31, 2016
,
2015
and
2014
, respectively.
|
•
|
Index options and futures contracts accounted for
88.2%
,
82.9%
and
81.8%
of our transaction fees for the years ended
December 31, 2016
,
2015
and
2014
, respectively.
|
•
|
Our share of total U.S. exchange-traded options contracts for the year ended
December 31, 2016
was
27.7%
, up from
27.1%
in
2015
and down from
29.9%
in
2014
.
|
•
|
Operating expenses were
54.7%
,
49.6%
and
49.2%
, of total operating revenues for the years ended
December 31, 2016
,
2015
and
2014
, respectively.
|
•
|
Compensation and benefits, representing our largest expense category, were
17.2%
,
16.7%
and
19.7%
, of total operating revenues for the years ended
December 31, 2016
,
2015
and
2014
, respectively.
|
•
|
Professional fees and outside services for the year ended
December 31, 2016
includes
$13.7 million
of acquisition-related costs, consisting mainly of legal and professional fees.
|
•
|
We intend to continue our efforts to expand the use of our products domestically and internationally through extended trading hours in our exclusive index options and futures products and investor education.
|
•
|
We intend to continue developing innovative proprietary products that meet the needs of the derivatives industry and complement our core products, both through strategic relationships and internal development.
|
•
|
We have designed our fee schedule to provide economic benefits to market participants that concentrate their overall trading activity at our exchanges.
|
•
|
We intend to continue to enhance our trading platform by continuing to invest in enhancing and augmenting the functionality and capacity of our trading systems and by developing the next generation of trading technology, CBOE Vector. However, the launch of CBOE Vector on CFE is suspended due to the pending Merger.
|
•
|
We evaluate strategic opportunities that leverage and complement our core business and that we believe will enhance stockholder value.
|
•
|
Equity options reflect trading in options contracts on the stocks of individual companies.
|
•
|
Index options reflect trading in index options contracts on market indexes.
|
•
|
ETP options include ETF options that are options on baskets of stocks designed to generally track an index, but which trade like individual stocks, and ETN options that are options on senior, unsecured, unsubordinated debt securities issued by an underwriting bank.
|
•
|
Futures contracts are standardized, transferable, exchange-traded contracts that require delivery of a commodity, bond, currency, stock index or other benchmark interests at a specified price and on a specified future date, which are settled in cash.
|
•
|
Revenue generated through various licensing agreements;
|
•
|
Revenue derived from fines assessed for rule violations;
|
•
|
Revenue associated with advertisements through our corporate web site,
www.cboe.com
;
|
•
|
Revenue generated from courses and seminars offered through CBOE's Options Institute;
|
•
|
Revenue generated through regulatory service agreements with other options exchanges (as of 2015, we no longer generated revenue from these regulatory service agreements);
|
•
|
Revenue generated through our order routing cancel fee (as of 2015, we waived order routing cancel fees) and position transfer fee;
|
•
|
Rental of commercial space in the lobby of our building; and
|
•
|
Other sources of revenue.
|
•
|
Transaction fees revenue is considered earned upon the execution of the trade recognized on a trade-date basis and presented net of applicable volume discounts. In the event liquidity providers prepay transaction fees, revenue is recognized based on the attainment of volume thresholds resulting in the amortization of the prepayment over the calendar year.
|
•
|
Access fee revenue is recognized during the period access is granted and assurance of collectability is provided.
|
•
|
Exchange services and other fees revenue is recognized during the period the service is provided.
|
•
|
Market data fees from OPRA are allocated based upon the share of total options transactions cleared for each of the OPRA members and is received quarterly. Revenue from our market data services is recognized in the period the data is provided.
|
•
|
Regulatory fees are recognized primarily on a trade-date basis.
|
|
2016
|
|
2015
|
|
Inc./(Dec.)
|
|
Percent
Change
|
|||||||
|
(in millions, except per share amounts)
|
|
|
|||||||||||
Total operating revenues
|
$
|
656.9
|
|
|
$
|
634.5
|
|
|
$
|
22.4
|
|
|
3.5
|
%
|
Total operating expenses
|
358.7
|
|
|
314.6
|
|
|
44.1
|
|
|
14.0
|
%
|
|||
Operating income
|
298.2
|
|
|
319.9
|
|
|
(21.7
|
)
|
|
(6.8
|
)%
|
|||
Total other income/(expense)
|
8.4
|
|
|
4.1
|
|
|
4.3
|
|
|
105.2
|
%
|
|||
Income before income taxes
|
306.6
|
|
|
324.0
|
|
|
(17.4
|
)
|
|
(5.4
|
)%
|
|||
Income tax provision
|
120.9
|
|
|
119.0
|
|
|
1.9
|
|
|
1.6
|
%
|
|||
Net income
|
$
|
185.7
|
|
|
$
|
205.0
|
|
|
$
|
(19.3
|
)
|
|
(9.4
|
)%
|
Net income allocated to common stockholders
|
$
|
184.9
|
|
|
$
|
204.1
|
|
|
$
|
(19.2
|
)
|
|
(9.4
|
)%
|
Operating income percentage
|
45.4
|
%
|
|
50.4
|
%
|
|
|
|
|
|
|
|||
Net income percentage
|
28.3
|
%
|
|
32.3
|
%
|
|
|
|
|
|
|
|||
Diluted—net income per share allocated to common stockholders
|
$
|
2.27
|
|
|
$
|
2.46
|
|
|
|
|
|
|
|
•
|
The increase in total operating revenues was primarily driven by higher transaction fees, exchange services and other fees, market data fees and regulatory fees, partially offset by lower access fees and other revenue.
|
•
|
The increase in total operating expenses was primarily driven by
higher compensation and benefits, professional fees and outside services, travel and promotional expense and royalty fees.
The increase in professional fees and outside services was mainly due to acquisition-related costs, which resulted in a lower operating margin for the year.
|
•
|
The increase in total other income/(expense) was primarily driven by proceeds from the settlement of litigation.
|
|
2016
|
|
2015
|
|
Inc./(Dec.)
|
|
Percent
Change
|
|||||||
|
(in millions)
|
|
|
|||||||||||
Transaction fees
|
$
|
463.3
|
|
|
$
|
456.0
|
|
|
$
|
7.3
|
|
|
1.6
|
%
|
Access fees
|
52.3
|
|
|
53.3
|
|
|
(1.0
|
)
|
|
(1.8
|
)%
|
|||
Exchange services and other fees
|
46.3
|
|
|
42.2
|
|
|
4.1
|
|
|
9.6
|
%
|
|||
Market data fees
|
33.2
|
|
|
30.0
|
|
|
3.2
|
|
|
10.4
|
%
|
|||
Regulatory fees
|
48.3
|
|
|
33.5
|
|
|
14.8
|
|
|
44.3
|
%
|
|||
Other revenue
|
13.5
|
|
|
19.5
|
|
|
(6.0
|
)
|
|
(30.5
|
)%
|
|||
Total operating revenues
|
$
|
656.9
|
|
|
$
|
634.5
|
|
|
$
|
22.4
|
|
|
3.5
|
%
|
|
2016
|
|
2015
|
|
Inc./(Dec.)
|
|
Percent
Change
|
|||||||
|
(in millions)
|
|
|
|||||||||||
Equities
|
$
|
23.4
|
|
|
$
|
36.4
|
|
|
$
|
(13.0
|
)
|
|
(35.7
|
)%
|
Indexes
|
307.7
|
|
|
290.3
|
|
|
17.4
|
|
|
6.0
|
%
|
|||
Exchange-traded products
|
31.1
|
|
|
41.8
|
|
|
(10.7
|
)
|
|
(25.6
|
)%
|
|||
Total options transaction fees
|
362.2
|
|
|
368.5
|
|
|
(6.3
|
)
|
|
(1.7
|
)%
|
|||
Futures
|
101.1
|
|
|
87.5
|
|
|
13.6
|
|
|
15.6
|
%
|
|||
Total transaction fees
|
$
|
463.3
|
|
|
$
|
456.0
|
|
|
$
|
7.3
|
|
|
1.6
|
%
|
|
2016
|
|
2015
|
|
Volume
Percent
Change
|
|
ADV
Percent
Change
|
||||||||||
|
Volume
|
|
ADV
|
|
Volume
|
|
ADV
|
|
|||||||||
|
(in millions)
|
|
|
|
|
||||||||||||
Equities
|
364.3
|
|
|
1.44
|
|
|
393.0
|
|
|
1.56
|
|
|
(7.3
|
)%
|
|
(7.3
|
)%
|
Indexes
|
433.3
|
|
|
1.72
|
|
|
408.3
|
|
|
1.62
|
|
|
6.1
|
%
|
|
6.1
|
%
|
Exchange-traded products
|
326.7
|
|
|
1.30
|
|
|
321.0
|
|
|
1.27
|
|
|
1.8
|
%
|
|
1.8
|
%
|
Total options contracts
|
1,124.3
|
|
|
4.46
|
|
|
1,122.3
|
|
|
4.45
|
|
|
0.2
|
%
|
|
0.2
|
%
|
Futures contracts
|
60.2
|
|
|
0.24
|
|
|
51.7
|
|
|
0.21
|
|
|
16.5
|
%
|
|
16.5
|
%
|
Total contracts
|
1,184.5
|
|
|
4.70
|
|
|
1,174.0
|
|
|
4.66
|
|
|
0.9
|
%
|
|
0.9
|
%
|
|
|
2016
|
|
2015
|
||
Equities
|
|
30.8
|
%
|
|
33.5
|
%
|
Indexes
|
|
36.6
|
%
|
|
34.8
|
%
|
Exchange-traded products
|
|
27.5
|
%
|
|
27.3
|
%
|
Futures
|
|
5.1
|
%
|
|
4.4
|
%
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
2016
|
|
2015
|
|
Percent
Change
|
|||||
Equities
|
$
|
0.064
|
|
|
$
|
0.093
|
|
|
(31.2
|
)%
|
Indexes
|
0.710
|
|
|
0.711
|
|
|
(0.1
|
)%
|
||
Exchange-traded products
|
0.095
|
|
|
0.130
|
|
|
(26.9
|
)%
|
||
Total options average revenue per contract
|
0.322
|
|
|
0.328
|
|
|
(1.8
|
)%
|
||
Futures
|
1.681
|
|
|
1.694
|
|
|
(0.8
|
)%
|
||
Total average revenue per contract
|
$
|
0.391
|
|
|
$
|
0.388
|
|
|
0.8
|
%
|
•
|
Product mix—
We experienced a shift in overall product mix. As a percentage of total volume, equities decreased to
30.8%
from
33.5%
, indexes increased to
36.6%
from
34.8%
and futures increased to
5.1%
from
4.4%
. Equities represent our lowest average revenue per contract, while index options and futures generate our highest options average revenue per contract and our highest total average revenue per contract, respectively.
|
|
2016
|
|
2015
|
|
Inc./(Dec.)
|
|
Percent
Change
|
|||||||
|
(in millions)
|
|
|
|||||||||||
Compensation and benefits
|
$
|
113.2
|
|
|
$
|
105.9
|
|
|
$
|
7.3
|
|
|
6.8
|
%
|
Depreciation and amortization
|
44.4
|
|
|
46.3
|
|
|
(1.9
|
)
|
|
(4.1
|
)%
|
|||
Technology support services
|
22.4
|
|
|
20.7
|
|
|
1.7
|
|
|
8.7
|
%
|
|||
Professional fees and outside services
|
78.5
|
|
|
50.1
|
|
|
28.4
|
|
|
56.9
|
%
|
|||
Royalty fees
|
77.9
|
|
|
70.6
|
|
|
7.3
|
|
|
10.5
|
%
|
|||
Order routing
|
0.9
|
|
|
2.3
|
|
|
(1.4
|
)
|
|
(60.8
|
)%
|
|||
Travel and promotional expenses
|
11.0
|
|
|
8.9
|
|
|
2.1
|
|
|
22.1
|
%
|
|||
Facilities costs
|
5.7
|
|
|
5.0
|
|
|
0.7
|
|
|
13.9
|
%
|
|||
Other expenses
|
4.7
|
|
|
4.8
|
|
|
(0.1
|
)
|
|
(3.2
|
)%
|
|||
Total operating expenses
|
$
|
358.7
|
|
|
$
|
314.6
|
|
|
$
|
44.1
|
|
|
14.0
|
%
|
|
2015
|
|
2014
|
|
Inc./(Dec.)
|
|
Percent
Change
|
|||||||
|
(in millions, except per share amounts)
|
|
|
|||||||||||
Total operating revenues
|
$
|
634.5
|
|
|
$
|
617.2
|
|
|
$
|
17.3
|
|
|
2.8
|
%
|
Total operating expenses
|
314.6
|
|
|
303.4
|
|
|
11.2
|
|
|
3.7
|
%
|
|||
Operating income
|
319.9
|
|
|
313.8
|
|
|
6.1
|
|
|
1.9
|
%
|
|||
Total other income/(expense)
|
4.1
|
|
|
(4.1
|
)
|
|
8.2
|
|
|
199.8
|
%
|
|||
Income before income taxes
|
324.0
|
|
|
309.7
|
|
|
14.3
|
|
|
4.6
|
%
|
|||
Income tax provision
|
119.0
|
|
|
120.0
|
|
|
(1.0
|
)
|
|
(0.8
|
)%
|
|||
Net income
|
$
|
205.0
|
|
|
$
|
189.7
|
|
|
$
|
15.3
|
|
|
8.1
|
%
|
Net income allocated to common stockholders
|
$
|
204.1
|
|
|
$
|
188.4
|
|
|
$
|
15.7
|
|
|
8.4
|
%
|
Operating income percentage
|
50.4
|
%
|
|
50.8
|
%
|
|
|
|
|
|
|
|||
Net income percentage
|
32.3
|
%
|
|
30.7
|
%
|
|
|
|
|
|
|
|||
Diluted—net income per share allocated to common stockholders
|
$
|
2.46
|
|
|
$
|
2.21
|
|
|
|
|
|
|
|
•
|
The increase in total operating revenues was primarily driven by higher transaction fees, exchange services and other fees and other revenue, partially offset by lower access fees and regulatory fees.
|
•
|
The increase in total operating expenses was primarily driven by higher depreciation and amortization, technology support services, professional fees and outside services and royalty fees, partially offset by lower compensation and benefits.
|
•
|
The increase in total other income/(expense) was primarily driven by the dividend declared by OCC in December 2015. The prior year included an impairment charge related to our investment in IPXI Holdings, LLC ("IPXI").
|
|
2015
|
|
2014
|
|
Inc./(Dec.)
|
|
Percent
Change
|
|||||||
|
(in millions)
|
|
|
|||||||||||
Transaction fees
|
$
|
456.0
|
|
|
$
|
437.8
|
|
|
$
|
18.2
|
|
|
4.2
|
%
|
Access fees
|
53.3
|
|
|
59.3
|
|
|
(6.0
|
)
|
|
(10.2
|
)%
|
|||
Exchange services and other fees
|
42.2
|
|
|
38.0
|
|
|
4.2
|
|
|
11.0
|
%
|
|||
Market data fees
|
30.0
|
|
|
30.4
|
|
|
(0.4
|
)
|
|
(1.4
|
)%
|
|||
Regulatory fees
|
33.5
|
|
|
37.1
|
|
|
(3.6
|
)
|
|
(9.7
|
)%
|
|||
Other revenue
|
19.5
|
|
|
14.6
|
|
|
4.9
|
|
|
34.0
|
%
|
|||
Total operating revenues
|
$
|
634.5
|
|
|
$
|
617.2
|
|
|
$
|
17.3
|
|
|
2.8
|
%
|
|
2015
|
|
2014
|
|
Inc./(Dec.)
|
|
Percent
Change
|
|||||||
|
(in millions)
|
|
|
|||||||||||
Equities
|
$
|
36.4
|
|
|
$
|
37.2
|
|
|
$
|
(0.8
|
)
|
|
(2.1
|
)%
|
Indexes
|
290.3
|
|
|
276.0
|
|
|
14.3
|
|
|
5.2
|
%
|
|||
Exchange-traded products
|
41.8
|
|
|
42.4
|
|
|
(0.6
|
)
|
|
(1.5
|
)%
|
|||
Total options transaction fees
|
368.5
|
|
|
355.6
|
|
|
12.9
|
|
|
3.6
|
%
|
|||
Futures
|
87.5
|
|
|
82.2
|
|
|
5.3
|
|
|
6.5
|
%
|
|||
Total transaction fees
|
$
|
456.0
|
|
|
$
|
437.8
|
|
|
$
|
18.2
|
|
|
4.2
|
%
|
|
2015
|
|
2014
|
|
Volume
Percent
Change
|
|
ADV
Percent
Change
|
||||||||||
|
Volume
|
|
ADV
|
|
Volume
|
|
ADV
|
|
|||||||||
|
(in millions)
|
|
|
|
|
||||||||||||
Equities
|
393.0
|
|
|
1.56
|
|
|
488.6
|
|
|
1.94
|
|
|
(19.6
|
)%
|
|
(19.6
|
)%
|
Indexes
|
408.3
|
|
|
1.62
|
|
|
406.5
|
|
|
1.61
|
|
|
0.4
|
%
|
|
0.4
|
%
|
Exchange-traded products
|
321.0
|
|
|
1.27
|
|
|
379.7
|
|
|
1.51
|
|
|
(15.5
|
)%
|
|
(15.5
|
)%
|
Total options contracts
|
1,122.3
|
|
|
4.45
|
|
|
1,274.8
|
|
|
5.06
|
|
|
(12.0
|
)%
|
|
(12.0
|
)%
|
Futures contracts
|
51.7
|
|
|
0.21
|
|
|
50.6
|
|
|
0.20
|
|
|
2.1
|
%
|
|
2.1
|
%
|
Total contracts
|
1,174.0
|
|
|
4.66
|
|
|
1,325.4
|
|
|
5.26
|
|
|
(11.4
|
)%
|
|
(11.4
|
)%
|
|
|
2015
|
|
2014
|
||
Equities
|
|
33.5
|
%
|
|
36.9
|
%
|
Indexes
|
|
34.8
|
%
|
|
30.7
|
%
|
Exchange-traded products
|
|
27.3
|
%
|
|
28.6
|
%
|
Futures
|
|
4.4
|
%
|
|
3.8
|
%
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
2015
|
|
2014
|
|
Percent
Change
|
|||||
Equities
|
$
|
0.093
|
|
|
$
|
0.076
|
|
|
22.4
|
%
|
Indexes
|
0.711
|
|
|
0.679
|
|
|
4.7
|
%
|
||
Exchange-traded products
|
0.130
|
|
|
0.112
|
|
|
16.1
|
%
|
||
Total options revenue per contract
|
0.328
|
|
|
0.279
|
|
|
17.6
|
%
|
||
Futures
|
1.694
|
|
|
1.623
|
|
|
4.4
|
%
|
||
Total average revenue per contract
|
$
|
0.388
|
|
|
$
|
0.330
|
|
|
17.6
|
%
|
•
|
Product mix—
We experienced a shift in overall product mix. As a percentage of total volume, equities decreased to 33.5% from 36.9%, indexes increased to 34.8% from 30.7% and futures increased to 4.4% from 3.8%. Equities represent our lowest average revenue per contract, while index options and futures generate our highest options average revenue per contract and our highest total average revenue per contract, respectively.
|
•
|
Rate structure—
Our rate structure includes sliding scales, volume discounts, volume incentive programs and caps on fees as part of our effort to increase liquidity and market share in multiply-listed options. The increase in average revenue per contract across all product categories was primarily a result of fee changes implemented in 2015 and lower volume discounts and incentives.
|
|
2015
|
|
2014
|
|
Inc./(Dec.)
|
|
Percent
Change
|
|||||||
|
(in millions)
|
|
|
|||||||||||
Compensation and benefits
|
$
|
105.9
|
|
|
$
|
121.7
|
|
|
$
|
(15.8
|
)
|
|
(13.0
|
)%
|
Depreciation and amortization
|
46.3
|
|
|
39.9
|
|
|
6.4
|
|
|
15.9
|
%
|
|||
Technology support services
|
20.7
|
|
|
19.2
|
|
|
1.5
|
|
|
7.7
|
%
|
|||
Professional fees and outside services
|
50.1
|
|
|
32.0
|
|
|
18.1
|
|
|
56.6
|
%
|
|||
Royalty fees
|
70.6
|
|
|
66.1
|
|
|
4.5
|
|
|
6.8
|
%
|
|||
Order routing
|
2.3
|
|
|
4.1
|
|
|
(1.8
|
)
|
|
(43.8
|
)%
|
|||
Travel and promotional expenses
|
8.9
|
|
|
9.0
|
|
|
(0.1
|
)
|
|
(0.7
|
)%
|
|||
Facilities costs
|
5.0
|
|
|
5.7
|
|
|
(0.7
|
)
|
|
(12.6
|
)%
|
|||
Other expenses
|
4.8
|
|
|
5.7
|
|
|
(0.9
|
)
|
|
(14.3
|
)%
|
|||
Total operating expenses
|
$
|
314.6
|
|
|
$
|
303.4
|
|
|
$
|
11.2
|
|
|
3.7
|
%
|
|
Total(1)
|
|
Less than
1 year
|
|
1 - 3 years
|
|
3 - 5 years
|
|
More than 5 years
|
||||||||||
Operating leases
|
$
|
3,247
|
|
|
$
|
1,182
|
|
|
$
|
749
|
|
|
$
|
406
|
|
|
$
|
910
|
|
Contractual obligations (2)
|
201,274
|
|
|
34,306
|
|
|
62,329
|
|
|
43,135
|
|
|
61,504
|
|
|||||
Total
|
$
|
204,521
|
|
|
$
|
35,488
|
|
|
$
|
63,078
|
|
|
$
|
43,541
|
|
|
$
|
62,414
|
|
|
Page
|
CBOE Holdings, Inc. and Subsidiaries:
|
|
(in thousands, except share amounts)
|
December 31, 2016
|
|
December 31, 2015
|
||||
Assets
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
97,298
|
|
|
$
|
102,253
|
|
Accounts receivable—net allowances of 2016 - $127 and 2015 - $150
|
69,902
|
|
|
62,535
|
|
||
Marketing fee receivable
|
6,685
|
|
|
5,682
|
|
||
Income taxes receivable
|
53,708
|
|
|
27,901
|
|
||
Other prepaid expenses
|
5,360
|
|
|
5,122
|
|
||
Deferred financing costs
|
1,958
|
|
|
—
|
|
||
Other current assets
|
134
|
|
|
625
|
|
||
Total Current Assets
|
235,045
|
|
|
204,118
|
|
||
Investments
|
72,923
|
|
|
48,430
|
|
||
Land
|
4,914
|
|
|
4,914
|
|
||
Property and Equipment:
|
|
|
|
||||
Construction in progress
|
173
|
|
|
885
|
|
||
Building
|
77,026
|
|
|
70,531
|
|
||
Furniture and equipment
|
138,837
|
|
|
144,597
|
|
||
Less accumulated depreciation and amortization
|
(160,101
|
)
|
|
(155,653
|
)
|
||
Total Property and Equipment—Net
|
55,935
|
|
|
60,360
|
|
||
Goodwill
|
26,468
|
|
|
7,655
|
|
||
Other Assets:
|
|
|
|
||||
Intangible assets (less accumulated amortization --2016 - $1,894 and 2015 - $182)
|
8,666
|
|
|
2,378
|
|
||
Software development work in progress
|
12,305
|
|
|
13,836
|
|
||
Data processing software and other assets (less accumulated amortization of 2016 - $171,950; 2015 - $164,152)
|
50,675
|
|
|
43,097
|
|
||
Deferred tax asset
|
3,494
|
|
|
—
|
|
||
Deferred financing long-term
|
6,190
|
|
|
—
|
|
||
Total Other Assets—Net
|
81,330
|
|
|
59,311
|
|
||
Total
|
$
|
476,615
|
|
|
$
|
384,788
|
|
Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
79,400
|
|
|
$
|
60,104
|
|
Marketing fee payable
|
7,218
|
|
|
6,141
|
|
||
Deferred revenue and other liabilities
|
3,107
|
|
|
4,019
|
|
||
Post-retirement benefit obligation - current
|
100
|
|
|
100
|
|
||
Contingent consideration - current
|
—
|
|
|
2,000
|
|
||
Income taxes payable
|
18
|
|
|
1,633
|
|
||
Total Current Liabilities
|
89,843
|
|
|
73,997
|
|
||
Long-term Liabilities:
|
|
|
|
||||
Post-retirement benefit obligation - long-term
|
1,843
|
|
|
1,896
|
|
||
Contingent consideration - long-term
|
—
|
|
|
1,379
|
|
||
Income taxes liability
|
52,100
|
|
|
39,679
|
|
||
Other long-term liabilities
|
2,283
|
|
|
2,883
|
|
||
Deferred income taxes
|
—
|
|
|
5,309
|
|
||
Total Long-term Liabilities
|
56,226
|
|
|
51,146
|
|
||
Commitments and Contingencies
|
|
|
|
||||
Total Liabilities
|
146,069
|
|
|
125,143
|
|
||
|
|
|
|
||||
Redeemable Noncontrolling Interests
|
12,600
|
|
|
—
|
|
||
|
|
|
|
||||
Stockholders' Equity:
|
|
|
|
||||
Preferred stock, $0.01 par value: 20,000,000 shares authorized, no shares issued and outstanding at December 31, 2016 or 2015
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value: 325,000,000 shares authorized; 92,950,065 issued and 81,285,307 outstanding at December 31, 2016; 92,738,803 issued and 82,088,549 outstanding at December 31, 2015
|
929
|
|
|
927
|
|
||
Additional paid-in-capital
|
139,249
|
|
|
123,577
|
|
||
Retained earnings
|
710,779
|
|
|
603,597
|
|
||
Treasury stock at cost – 11,664,758 shares at December 31, 2016 and 10,650,254 shares at December 31, 2015
|
(532,249
|
)
|
|
(467,632
|
)
|
||
Accumulated other comprehensive loss
|
(762
|
)
|
|
(824
|
)
|
||
Total Stockholders' Equity
|
317,946
|
|
|
259,645
|
|
||
Total
|
$
|
476,615
|
|
|
$
|
384,788
|
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
||||||
(in thousands, except per share amounts)
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||
Operating Revenues:
|
|
|
|
|
|
||||||
Transaction fees
|
$
|
463,294
|
|
|
$
|
456,016
|
|
|
$
|
437,764
|
|
Access fees
|
52,358
|
|
|
53,295
|
|
|
59,332
|
|
|||
Exchange services and other fees
|
46,261
|
|
|
42,209
|
|
|
38,042
|
|
|||
Market data fees
|
33,159
|
|
|
30,034
|
|
|
30,447
|
|
|||
Regulatory fees
|
48,321
|
|
|
33,489
|
|
|
37,083
|
|
|||
Other revenue
|
13,553
|
|
|
19,502
|
|
|
14,557
|
|
|||
Total Operating Revenues
|
656,946
|
|
|
634,545
|
|
|
617,225
|
|
|||
Operating Expenses:
|
|
|
|
|
|
||||||
Compensation and benefits
|
113,152
|
|
|
105,925
|
|
|
121,734
|
|
|||
Depreciation and amortization
|
44,377
|
|
|
46,274
|
|
|
39,913
|
|
|||
Technology support services
|
22,465
|
|
|
20,662
|
|
|
19,189
|
|
|||
Professional fees and outside services
|
78,543
|
|
|
50,060
|
|
|
31,976
|
|
|||
Royalty fees
|
77,953
|
|
|
70,574
|
|
|
66,110
|
|
|||
Order routing
|
900
|
|
|
2,293
|
|
|
4,080
|
|
|||
Travel and promotional expenses
|
10,971
|
|
|
8,982
|
|
|
9,046
|
|
|||
Facilities costs
|
5,693
|
|
|
4,998
|
|
|
5,721
|
|
|||
Other expenses
|
4,692
|
|
|
4,849
|
|
|
5,655
|
|
|||
Total Operating Expenses
|
358,746
|
|
|
314,617
|
|
|
303,424
|
|
|||
Operating Income
|
298,200
|
|
|
319,928
|
|
|
313,801
|
|
|||
Other Income/(Expense):
|
|
|
|
|
|
||||||
Investment and other income
|
12,984
|
|
|
3,692
|
|
|
113
|
|
|||
Net income/(loss) from investments
|
1,167
|
|
|
447
|
|
|
(4,217
|
)
|
|||
Interest and other borrowing costs
|
(5,747
|
)
|
|
(43
|
)
|
|
—
|
|
|||
Total Other Income/(Expense)
|
8,404
|
|
|
4,096
|
|
|
(4,104
|
)
|
|||
Income Before Income Taxes
|
306,604
|
|
|
324,024
|
|
|
309,697
|
|
|||
Income tax provision
|
120,884
|
|
|
119,001
|
|
|
119,983
|
|
|||
Net Income
|
185,720
|
|
|
205,023
|
|
|
189,714
|
|
|||
Net loss attributable to noncontrolling interests
|
1,100
|
|
|
—
|
|
|
—
|
|
|||
Net Income Excluding Noncontrolling Interests
|
186,820
|
|
|
205,023
|
|
|
189,714
|
|
|||
Change in redemption value of noncontrolling interests
|
(1,100
|
)
|
|
—
|
|
|
—
|
|
|||
Net Income allocated to participating securities
|
(775
|
)
|
|
(898
|
)
|
|
(1,322
|
)
|
|||
Net Income Allocated to Common Stockholders
|
$
|
184,945
|
|
|
$
|
204,125
|
|
|
$
|
188,392
|
|
Net Income Per Share Allocated to Common Stockholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.27
|
|
|
$
|
2.46
|
|
|
$
|
2.21
|
|
Diluted
|
2.27
|
|
|
2.46
|
|
|
2.21
|
|
|||
Weighted average shares used in computing income per share:
|
|
|
|
|
|
||||||
Basic
|
81,432
|
|
|
83,081
|
|
|
85,406
|
|
|||
Diluted
|
81,432
|
|
|
83,081
|
|
|
85,406
|
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
||||||
(in thousands)
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||
|
|
|
|
|
|
||||||
Net Income
|
$
|
185,720
|
|
|
$
|
205,023
|
|
|
$
|
189,714
|
|
|
|
|
|
|
|
||||||
Other Comprehensive Income (Loss) - net of tax:
|
|
|
|
|
|
||||||
Post retirement benefit obligation
|
62
|
|
|
(135
|
)
|
|
361
|
|
|||
Comprehensive Income
|
185,782
|
|
|
204,888
|
|
|
190,075
|
|
|||
|
|
|
|
|
|
||||||
Comprehensive loss attributable to noncontrolling interests
|
1,100
|
|
|
—
|
|
|
—
|
|
|||
Comprehensive Income Excluding noncontrolling interests
|
186,882
|
|
|
204,888
|
|
|
190,075
|
|
|||
|
|
|
|
|
|
||||||
Change in redemption value of noncontrolling interests
|
(1,100
|
)
|
|
—
|
|
|
—
|
|
|||
Comprehensive income allocated to participating securities
|
(775
|
)
|
|
(898
|
)
|
|
(1,322
|
)
|
|||
Comprehensive Income Allocated to Common Stockholders
|
$
|
185,007
|
|
|
$
|
203,990
|
|
|
$
|
188,753
|
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
||||||
(in thousands)
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net Income
|
$
|
185,720
|
|
|
$
|
205,023
|
|
|
$
|
189,714
|
|
Adjustments to reconcile net income to net cash flows from operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
44,377
|
|
|
46,274
|
|
|
39,913
|
|
|||
Other amortization
|
78
|
|
|
81
|
|
|
87
|
|
|||
Provision for deferred income taxes
|
(8,845
|
)
|
|
(8,282
|
)
|
|
(290
|
)
|
|||
Gain on settlement of contingent consideration
|
(1,399
|
)
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation
|
14,503
|
|
|
12,181
|
|
|
15,577
|
|
|||
Loss on disposition of property
|
9
|
|
|
617
|
|
|
662
|
|
|||
Equity (gain)/loss in investments
|
(1,167
|
)
|
|
(811
|
)
|
|
1,217
|
|
|||
Impairment of investment and other assets
|
—
|
|
|
118
|
|
|
3,000
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(7,367
|
)
|
|
(4,847
|
)
|
|
(8,498
|
)
|
|||
Marketing fee receivable
|
(1,003
|
)
|
|
5,015
|
|
|
(1,828
|
)
|
|||
Income taxes receivable
|
(25,807
|
)
|
|
(6,398
|
)
|
|
536
|
|
|||
Prepaid expenses
|
(213
|
)
|
|
(500
|
)
|
|
(615
|
)
|
|||
Other current assets
|
491
|
|
|
799
|
|
|
1,745
|
|
|||
Accounts payable and accrued expenses
|
19,841
|
|
|
1,550
|
|
|
5,888
|
|
|||
Marketing fee payable
|
1,077
|
|
|
(5,095
|
)
|
|
1,794
|
|
|||
Deferred revenue and other liabilities
|
(1,512
|
)
|
|
717
|
|
|
1,229
|
|
|||
Post-retirement benefit obligations
|
(26
|
)
|
|
(19
|
)
|
|
(28
|
)
|
|||
Income tax liability
|
12,421
|
|
|
(1,004
|
)
|
|
10,780
|
|
|||
Income tax payable
|
(1,615
|
)
|
|
(141
|
)
|
|
1,774
|
|
|||
Net Cash Flows Provided by Operating Activities
|
229,563
|
|
|
245,278
|
|
|
262,657
|
|
|||
Cash Flows from Investing Activities:
|
|
|
|
|
|
||||||
Capital and other assets expenditures
|
(44,402
|
)
|
|
(39,340
|
)
|
|
(50,154
|
)
|
|||
Acquisition of a majority interest in a business, net of cash received
|
(14,257
|
)
|
|
(2,960
|
)
|
|
—
|
|
|||
Payment of contingent consideration from acquisition
|
(1,980
|
)
|
|
—
|
|
|
—
|
|
|||
Investments
|
(23,326
|
)
|
|
(35,386
|
)
|
|
(1,987
|
)
|
|||
Other
|
(421
|
)
|
|
(1,735
|
)
|
|
3
|
|
|||
Net Cash Flows Used in Investing Activities
|
(84,386
|
)
|
|
(79,421
|
)
|
|
(52,138
|
)
|
|||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||||||
Payment of quarterly dividends
|
(78,538
|
)
|
|
(73,431
|
)
|
|
(66,999
|
)
|
|||
Payment of special dividend
|
—
|
|
|
—
|
|
|
(43,831
|
)
|
|||
Deferred financing costs
|
(8,148
|
)
|
|
—
|
|
|
—
|
|
|||
Excess tax benefit from stock-based compensation
|
1,171
|
|
|
1,285
|
|
|
3,557
|
|
|||
Purchase of common stock from employees
|
(4,119
|
)
|
|
(3,178
|
)
|
|
(8,332
|
)
|
|||
Payment of outstanding debt in conjunction with acquisition of a business
|
—
|
|
|
(4,040
|
)
|
|
—
|
|
|||
Purchase of common stock under announced program
|
(60,498
|
)
|
|
(132,167
|
)
|
|
(168,328
|
)
|
|||
Net Cash Flows Used in Financing Activities
|
(150,132
|
)
|
|
(211,531
|
)
|
|
(283,933
|
)
|
|||
Net Decrease in Cash and Cash Equivalents
|
(4,955
|
)
|
|
(45,674
|
)
|
|
(73,414
|
)
|
|||
Cash and Cash Equivalents at Beginning of Period
|
102,253
|
|
|
147,927
|
|
|
221,341
|
|
|||
Cash and Cash Equivalents at End of Period
|
$
|
97,298
|
|
|
$
|
102,253
|
|
|
$
|
147,927
|
|
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|
||||||
Cash paid for income taxes
|
$
|
142,056
|
|
|
$
|
133,460
|
|
|
$
|
103,976
|
|
Non-cash activities:
|
|
|
|
|
|
||||||
Change in post-retirement benefit obligation
|
(104
|
)
|
|
220
|
|
|
(583
|
)
|
|||
Unpaid liability to acquire equipment and software
|
—
|
|
|
2,756
|
|
|
2,769
|
|
|||
Contingent consideration - current
|
—
|
|
|
2,000
|
|
|
—
|
|
|||
Contingent consideration - long-term
|
—
|
|
|
1,379
|
|
|
—
|
|
(in thousands)
|
Preferred
Stock
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Treasury Stock
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Stockholders'
Equity
|
|
Redeemable Noncontrolling Interests
|
||||||||||||||||
Balance-January 1, 2014
|
—
|
|
|
$
|
919
|
|
|
$
|
90,985
|
|
|
$
|
349,290
|
|
|
$
|
(155,627
|
)
|
|
$
|
(1,050
|
)
|
|
$
|
284,517
|
|
|
|
|||
Cash dividends on common stock of $0.78 per share
|
|
|
|
|
|
|
(66,999
|
)
|
|
|
|
|
|
(66,999
|
)
|
|
|
||||||||||||||
Stock-based compensation
|
|
|
|
|
15,577
|
|
|
|
|
|
|
|
|
15,577
|
|
|
|
||||||||||||||
Issuance of vested restricted stock granted to employees
|
|
|
7
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
—
|
|
|
|
|||||||||||||
Excess tax benefits from stock-based compensation plan
|
|
|
|
|
3,557
|
|
|
|
|
|
|
|
|
3,557
|
|
|
|
||||||||||||||
Purchase of common stock
|
|
|
|
|
|
|
|
|
(176,660
|
)
|
|
|
|
(176,660
|
)
|
|
|
||||||||||||||
Net income
|
|
|
|
|
|
|
189,714
|
|
|
|
|
|
|
189,714
|
|
|
|
||||||||||||||
Post-retirement benefit obligation adjustment—net of tax expense of $222
|
|
|
|
|
|
|
|
|
|
|
361
|
|
|
361
|
|
|
|
||||||||||||||
Balance-December 31, 2014
|
—
|
|
|
926
|
|
|
110,112
|
|
|
472,005
|
|
|
(332,287
|
)
|
|
(689
|
)
|
|
250,067
|
|
|
—
|
|
||||||||
Cash dividends on common stock of $0.88 per share
|
|
|
|
|
|
|
(73,431
|
)
|
|
|
|
|
|
(73,431
|
)
|
|
|
||||||||||||||
Stock-based compensation
|
|
|
|
|
12,181
|
|
|
|
|
|
|
|
|
12,181
|
|
|
|
||||||||||||||
Issuance of vested restricted stock granted to employees
|
|
|
1
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
—
|
|
|
|
|||||||||||||
Excess tax benefits from stock-based compensation plan
|
|
|
|
|
1,285
|
|
|
|
|
|
|
|
|
1,285
|
|
|
|
||||||||||||||
Purchase of common stock
|
|
|
|
|
|
|
|
|
(135,345
|
)
|
|
|
|
(135,345
|
)
|
|
|
||||||||||||||
Net income
|
|
|
|
|
|
|
205,023
|
|
|
|
|
|
|
205,023
|
|
|
|
||||||||||||||
Post-retirement benefit obligation adjustment—net of tax benefit of $86
|
|
|
|
|
|
|
|
|
|
|
(135
|
)
|
|
(135
|
)
|
|
|
||||||||||||||
Balance-December 31, 2015
|
—
|
|
|
927
|
|
|
123,577
|
|
|
603,597
|
|
|
(467,632
|
)
|
|
(824
|
)
|
|
259,645
|
|
|
—
|
|
||||||||
Cash dividends on common stock of $0.96 per share
|
|
|
|
|
|
|
(78,538
|
)
|
|
|
|
|
|
(78,538
|
)
|
|
|
||||||||||||||
Stock-based compensation
|
|
|
|
|
14,503
|
|
|
|
|
|
|
|
|
14,503
|
|
|
|
||||||||||||||
Issuance of vested restricted stock granted to employees
|
|
|
2
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
—
|
|
|
|
|||||||||||||
Excess tax benefits from stock-based compensation plan
|
|
|
|
|
1,171
|
|
|
|
|
|
|
|
|
1,171
|
|
|
|
||||||||||||||
Purchase of common stock
|
|
|
|
|
|
|
|
|
(64,617
|
)
|
|
|
|
(64,617
|
)
|
|
|
||||||||||||||
Net Income excluding noncontrolling interests
|
|
|
|
|
|
|
186,820
|
|
|
|
|
|
|
186,820
|
|
|
|
||||||||||||||
Increase due to acquiring majority of outstanding equity of Vest
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
12,600
|
|
||||||||||||||
Net loss attributable to redeemable noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(1,100
|
)
|
||||||||||||||
Redemption value adjustment
|
|
|
|
|
|
|
(1,100
|
)
|
|
|
|
|
|
(1,100
|
)
|
|
1,100
|
|
|||||||||||||
Post-retirement benefit obligation adjustment—net of tax expense of $42
|
|
|
|
|
|
|
|
|
|
|
$
|
62
|
|
|
62
|
|
|
|
|||||||||||||
Balance-December 31, 2016
|
$
|
—
|
|
|
$
|
929
|
|
|
$
|
139,249
|
|
|
$
|
710,779
|
|
|
$
|
(532,249
|
)
|
|
$
|
(762
|
)
|
|
$
|
317,946
|
|
|
$
|
12,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in thousands)
|
|
|
||
Purchase Price
|
$
|
18,900
|
|
|
|
|
|
||
Fair Value of Assets Acquired:
|
|
|
||
Cash
|
$
|
4,700
|
|
|
Intangible assets
|
8,000
|
|
|
|
Goodwill
|
18,800
|
|
|
|
Total Assets Acquired
|
$
|
31,500
|
|
|
Redeemable noncontrolling interests
|
12,600
|
|
|
|
Net Assets Acquired
|
$
|
18,900
|
|
|
|
|
|
|
As of December 31, 2016
|
Estimated Useful Lives
|
||
Customer relationships
|
$
|
3,000
|
|
9 years
|
Trade names
|
1,000
|
|
7 years
|
|
Technology
|
4,000
|
|
5 years
|
|
Total Intangible Assets Acquired
|
8,000
|
|
|
|
Less accumulated amortization
|
1,276
|
|
|
|
Total Intangibles, net
|
$
|
6,724
|
|
|
Year
|
|
Amortization expense
|
||
2017
|
|
$
|
1,276
|
|
2018
|
|
1,276
|
|
|
2019
|
|
1,276
|
|
|
2020
|
|
1,276
|
|
|
2021
|
|
476
|
|
|
Total
|
|
$
|
5,580
|
|
|
|
|
|
As of December 31, 2016
|
Estimated Useful Lives
|
||
Customer relationships
|
$
|
910
|
|
13 years
|
Trade names
|
370
|
|
10 years
|
|
Technology
|
1,130
|
|
2-5 years
|
|
Other
|
150
|
|
1-4 years
|
|
Total
|
2,560
|
|
|
|
Less accumulated amortization
|
617
|
|
|
|
Total Intangibles, net
|
$
|
1,943
|
|
|
|
|
|
Year
|
|
Amortization expense
|
||
2017
|
|
379
|
|
|
2018
|
|
349
|
|
|
2019
|
|
309
|
|
|
2020
|
|
206
|
|
|
2021
|
|
107
|
|
|
Total
|
|
$
|
1,350
|
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Equity Method
|
|
|
|
||||
Investment in Signal Trading Systems, LLC
|
$
|
12,409
|
|
|
$
|
12,185
|
|
Investment in CBOE Stock Exchange, LLC
|
—
|
|
|
—
|
|
||
Total equity method investments
|
12,409
|
|
|
12,185
|
|
||
|
|
|
|
||||
Cost Method
|
|
|
|
||||
Investment in OCC
|
30,333
|
|
|
30,333
|
|
||
Other cost method investments
|
30,181
|
|
|
5,912
|
|
||
Total cost method investments
|
60,514
|
|
|
36,245
|
|
||
|
|
|
|
||||
Total Investments
|
$
|
72,923
|
|
|
$
|
48,430
|
|
|
Redeemable Noncontrolling Interest
|
||
Balance as of January 1, 2016
|
$
|
—
|
|
Increase due to acquiring majority of outstanding equity of Vest
|
12,600
|
|
|
Net loss attributable to redeemable noncontrolling interest
|
(1,100
|
)
|
|
Redemption value adjustment
|
1,100
|
|
|
Balance as of December 31, 2016
|
$
|
12,600
|
|
|
|
|
2016
|
|
2015
|
||||
Compensation and benefit related liabilities
|
$
|
25,505
|
|
|
$
|
23,304
|
|
Royalties
|
17,807
|
|
|
15,409
|
|
||
Contract services
|
12,166
|
|
|
6,684
|
|
||
Acquisition related (1)
|
6,856
|
|
|
—
|
|
||
Accounts payable
|
6,466
|
|
|
1,762
|
|
||
Purchase of common stock (2)
|
—
|
|
|
1,778
|
|
||
Facilities
|
2,066
|
|
|
2,099
|
|
||
Legal
|
1,052
|
|
|
1,536
|
|
||
Market linkage
|
917
|
|
|
628
|
|
||
Other
|
6,565
|
|
|
6,904
|
|
||
Total
|
$
|
79,400
|
|
|
$
|
60,104
|
|
|
Balance at
December 31, 2015 |
|
Cash
Additions
|
|
Revenue
Recognition
|
|
Balance at
December 31, 2016 |
||||||||
Liquidity provider sliding scale (1)
|
$
|
—
|
|
|
$
|
11,400
|
|
|
$
|
(11,400
|
)
|
|
$
|
—
|
|
Other, net
|
4,019
|
|
|
11,333
|
|
|
(12,245
|
)
|
|
3,107
|
|
||||
Total deferred revenue
|
$
|
4,019
|
|
|
$
|
22,733
|
|
|
$
|
(23,645
|
)
|
|
$
|
3,107
|
|
|
Balance at
December 31, 2014 |
|
Cash
Additions
|
|
Revenue
Recognition
|
|
Balance at
December 31, 2015 |
||||||||
Liquidity provider sliding scale (1)
|
$
|
|
|
|
$
|
14,400
|
|
|
$
|
(14,400
|
)
|
|
$
|
—
|
|
Other, net
|
1,988
|
|
|
11,610
|
|
|
(9,579
|
)
|
|
4,019
|
|
||||
Total deferred revenue
|
$
|
1,988
|
|
|
$
|
26,010
|
|
|
$
|
(23,979
|
)
|
|
$
|
4,019
|
|
|
Number of Shares
of Restricted
Stock
|
|
Weighted Average
Grant-Date Fair
Value
|
|||
Unvested restricted stock at January 1, 2016
|
456,570
|
|
|
$
|
55.70
|
|
Granted
|
241,681
|
|
|
64.10
|
|
|
Vested
|
(211,235
|
)
|
|
48.14
|
|
|
Forfeited
|
(6,421
|
)
|
|
64.50
|
|
|
Unvested restricted stock at December 31, 2016
|
480,595
|
|
|
$
|
63.64
|
|
|
2016
|
|
2015
|
|
2014
|
|||
Statutory federal income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income tax rate, net of federal income tax effect
|
4.5
|
|
|
4.4
|
|
|
3.5
|
|
Section 199 deductions
|
(2.6
|
)
|
|
(1.9
|
)
|
|
(1.7
|
)
|
Other, net
|
2.5
|
|
|
(0.8
|
)
|
|
1.9
|
|
Effective income tax rate
|
39.4
|
%
|
|
36.7
|
%
|
|
38.7
|
%
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
107,083
|
|
|
$
|
103,344
|
|
|
$
|
95,946
|
|
State
|
22,646
|
|
|
23,939
|
|
|
24,327
|
|
|||
Total current
|
129,729
|
|
|
127,283
|
|
|
120,273
|
|
|||
Deferred
|
|
|
|
|
|
||||||
Federal
|
(7,633
|
)
|
|
(6,381
|
)
|
|
1,955
|
|
|||
State
|
(1,212
|
)
|
|
(1,901
|
)
|
|
(2,245
|
)
|
|||
Total deferred
|
(8,845
|
)
|
|
(8,282
|
)
|
|
(290
|
)
|
|||
Total
|
$
|
120,884
|
|
|
$
|
119,001
|
|
|
$
|
119,983
|
|
|
2016
|
|
2015
|
||||
Deferred tax assets
|
$
|
38,688
|
|
|
$
|
33,564
|
|
Deferred tax liabilities
|
(35,194
|
)
|
|
(38,873
|
)
|
||
Net deferred income tax asset /(liability)
|
$
|
3,494
|
|
|
$
|
(5,309
|
)
|
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
||||
Intangibles
|
$
|
32
|
|
|
$
|
38
|
|
Accrued compensation and benefits
|
16,317
|
|
|
15,406
|
|
||
Property, equipment and technology, net
|
619
|
|
|
645
|
|
||
Investment in affiliates
|
4,668
|
|
|
7,264
|
|
||
Other
|
17,052
|
|
|
10,211
|
|
||
Total deferred tax assets
|
38,688
|
|
|
33,564
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Property, equipment and technology, net
|
(32,312
|
)
|
|
(35,859
|
)
|
||
Investment in affiliates
|
(1,724
|
)
|
|
(1,707
|
)
|
||
Prepaid
|
(1,145
|
)
|
|
(1,303
|
)
|
||
Other
|
(13
|
)
|
|
(4
|
)
|
||
Total deferred tax liabilities
|
(35,194
|
)
|
|
(38,873
|
)
|
||
Net deferred tax assets/(liabilities)
|
$
|
3,494
|
|
|
$
|
(5,309
|
)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance as of January 1
|
$
|
31,903
|
|
|
$
|
35,429
|
|
|
$
|
26,745
|
|
Gross increases on tax positions in prior period
|
8,801
|
|
|
70
|
|
|
2,828
|
|
|||
Gross decreases on tax positions in prior period
|
(608
|
)
|
|
(4,245
|
)
|
|
(1,053
|
)
|
|||
Gross increases on tax positions in current period
|
3,591
|
|
|
1,891
|
|
|
8,113
|
|
|||
Lapse of statute of limitations
|
(1,816
|
)
|
|
(1,242
|
)
|
|
(1,204
|
)
|
|||
Balance as of December 31
|
$
|
41,871
|
|
|
$
|
31,903
|
|
|
$
|
35,429
|
|
•
|
Level 1—Unadjusted inputs based on quoted markets for identical assets or liabilities.
|
•
|
Level 2—Observable inputs, either direct or indirect, not including Level 1, corroborated by market data or based upon quoted prices in non-active markets.
|
•
|
Level 3—Unobservable inputs that reflect management’s best assumptions of what market participants would use in valuing the asset or liability.
|
(amounts in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets at fair value:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
67,500
|
|
|
—
|
|
|
—
|
|
|
$
|
67,500
|
|
||
Total assets at fair value at December 31, 2016
|
$
|
67,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
67,500
|
|
(amounts in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets at fair value:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
84,000
|
|
|
—
|
|
|
—
|
|
|
$
|
84,000
|
|
||
Total assets at fair value at December 31, 2015
|
$
|
84,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
84,000
|
|
Year
|
Operating
Leases
|
Contractual Obligations
|
Total
|
||||||
2017
|
$
|
1,182
|
|
$
|
34,306
|
|
$
|
35,488
|
|
2018
|
541
|
|
31,158
|
|
31,699
|
|
|||
2019
|
208
|
|
31,171
|
|
31,379
|
|
|||
2020
|
200
|
|
22,935
|
|
23,135
|
|
|||
2021
|
206
|
|
20,200
|
|
20,406
|
|
|||
Total
|
$
|
2,337
|
|
$
|
139,770
|
|
$
|
142,107
|
|
(in thousands, except per share amounts)
|
2016
|
|
2015
|
|
2014
|
||||||
Basic EPS Numerator:
|
|
|
|
|
|
||||||
Net Income
|
$
|
185,720
|
|
|
$
|
205,023
|
|
|
$
|
189,714
|
|
Loss attributable to noncontrolling interests
|
1,100
|
|
|
—
|
|
|
—
|
|
|||
Net Income excluding noncontrolling interests
|
186,820
|
|
|
205,023
|
|
|
189,714
|
|
|||
Change in redemption value of noncontrolling interests
|
(1,100
|
)
|
|
—
|
|
|
—
|
|
|||
Earnings allocated to participating securities
|
(775
|
)
|
|
(898
|
)
|
|
(1,322
|
)
|
|||
Net Income allocated to common stockholders
|
$
|
184,945
|
|
|
$
|
204,125
|
|
|
$
|
188,392
|
|
Basic EPS Denominator:
|
|
|
|
|
|
||||||
Weighted average shares outstanding
|
81,432
|
|
|
83,081
|
|
|
85,406
|
|
|||
Basic Net Income Per Common Share
|
$
|
2.27
|
|
|
$
|
2.46
|
|
|
$
|
2.21
|
|
|
|
|
|
|
|
||||||
Diluted EPS Numerator:
|
|
|
|
|
|
||||||
Net Income
|
$
|
185,720
|
|
|
$
|
205,023
|
|
|
$
|
189,714
|
|
Loss attributable to noncontrolling interests
|
1,100
|
|
|
—
|
|
|
—
|
|
|||
Net Income excluding noncontrolling interests
|
186,820
|
|
|
205,023
|
|
|
189,714
|
|
|||
Change in redemption value of noncontrolling interests
|
(1,100
|
)
|
|
—
|
|
|
—
|
|
|||
Earnings allocated to participating securities
|
(775
|
)
|
|
(898
|
)
|
|
(1,322
|
)
|
|||
Net Income allocated to common stockholders
|
$
|
184,945
|
|
|
$
|
204,125
|
|
|
$
|
188,392
|
|
Diluted EPS Denominator:
|
|
|
|
|
|
||||||
Weighted average shares outstanding
|
81,432
|
|
|
83,081
|
|
|
85,406
|
|
|||
Dilutive common shares issued under stock program
|
—
|
|
|
—
|
|
|
—
|
|
|||
Diluted Net Income Per Common Share
|
$
|
2.27
|
|
|
$
|
2.46
|
|
|
$
|
2.21
|
|
Year ended December 31, 2016 (in thousands)
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Year
|
||||||||||
Operating revenues
|
$
|
162,330
|
|
|
$
|
163,329
|
|
|
$
|
156,207
|
|
|
$
|
175,080
|
|
|
$
|
656,946
|
|
Operating expenses
|
82,849
|
|
|
85,362
|
|
|
90,557
|
|
|
99,978
|
|
|
358,746
|
|
|||||
Operating income
|
79,481
|
|
|
77,967
|
|
|
65,650
|
|
|
75,102
|
|
|
298,200
|
|
|||||
Net income
|
$
|
49,176
|
|
|
$
|
50,931
|
|
|
$
|
40,451
|
|
|
$
|
45,162
|
|
|
$
|
185,720
|
|
Net income allocated to common stockholders
|
$
|
49,198
|
|
|
$
|
50,719
|
|
|
$
|
40,280
|
|
|
$
|
44,748
|
|
|
$
|
184,945
|
|
Diluted—net income per share to common stockholders
|
$
|
0.60
|
|
|
$
|
0.62
|
|
|
$
|
0.50
|
|
|
$
|
0.55
|
|
|
$
|
2.27
|
|
Year ended December 31, 2015 (in thousands)
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Year
|
||||||||||
Operating revenues
|
$
|
142,839
|
|
|
$
|
148,725
|
|
|
$
|
187,035
|
|
|
$
|
155,946
|
|
|
$
|
634,545
|
|
Operating expenses
|
73,286
|
|
|
75,355
|
|
|
85,925
|
|
|
80,051
|
|
|
314,617
|
|
|||||
Operating income
|
69,553
|
|
|
73,370
|
|
|
101,110
|
|
|
75,895
|
|
|
319,928
|
|
|||||
Net income
|
$
|
42,259
|
|
|
$
|
44,845
|
|
|
$
|
67,516
|
|
|
$
|
50,403
|
|
|
$
|
205,023
|
|
Net income allocated to common stockholders
|
$
|
42,079
|
|
|
$
|
44,646
|
|
|
$
|
67,219
|
|
|
$
|
50,181
|
|
|
$
|
204,125
|
|
Diluted—net income per share to common stockholders
|
$
|
0.50
|
|
|
$
|
0.54
|
|
|
$
|
0.81
|
|
|
$
|
0.61
|
|
|
$
|
2.46
|
|
•
|
In the third and fourth quarters of 2016, the Company recognized
$8.6 million
and
$4.2 million
, respectively, in professional fees and outside services related to the planned acquisition of Bats.
|
•
|
In the fourth quarter of 2016, the Company recorded amortization of
$5.5 million
for expenses associated with a bridge loan facility related to the proposed acquisition of Bats.
|
•
|
In the third quarter of 2016, the Company recognized
$1.4 million
gain on settlement of contingent consideration.
|
•
|
In the second quarter of 2016, the Company recognized
$5.5 million
in investment and other income for a settlement of attorney fees and expenses relating to a litigation matter.
|
•
|
In the fourth quarter of
2015
, the Company recognized
$2.0 million
of revenue to adjust for incorrect coding of transactions by an exchange participant related to prior periods.
|
•
|
In the third quarter of
2015
, the Company recorded a
$4.3 million
tax benefit from the release of an uncertain tax provision related to research and development credits, which were effectively settled.
|
(a)
|
Documents filed as part of this report
|
•
|
Consolidated Balance Sheets as of
December 31, 2016
and
2015
|
•
|
Consolidated Statements of Income for the years ended
December 31, 2016
,
2015
and
2014
|
•
|
Consolidated Statements of Comprehensive Income for the years ended
December 31, 2016
,
2015
and
2014
|
•
|
Consolidated Statements of Cash Flows for the years ended
December 31, 2016
,
2015
and
2014
|
•
|
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 2016
,
2015
and
2014
|
•
|
Notes to Consolidated Financial Statements
|
(b)
|
Exhibits
|
Exhibit
No.
|
|
Description of Exhibit
|
|
2.1
|
|
|
Agreement and Plan of Merger, dated as of September 25, 2016, by and among CBOE Holdings, Inc., CBOE Corporation, CBOE V, LLC and Bats Global Markets, Inc., incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-34774), filed on September 28, 2016.**
|
3.1
|
|
|
Second Amended and Restated Certificate of Incorporation of CBOE Holdings, Inc., incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 001-34774) filed on February 19, 2016.
|
3.2
|
|
|
Third Amended and Restated Bylaws of CBOE Holdings, Inc., incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K (File No. 001-34774) filed on November 25, 2015.
|
4.1
|
|
|
Indenture, dated as of January 12, 2017, by and between the CBOE Holdings, Inc. and Wells Fargo Bank National Association, as trustee, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-34774), filed on January 12, 2017.
|
4.2
|
|
|
Officer’s Certificate, dated as of January 12, 2017, establishing the 3.650% Senior Notes due 2027 of CBOE Holdings, Inc., incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (File No. 001-34774), filed on January 12, 2017.
|
4.3
|
|
|
Form of 3.650% Senior Notes due 2027 (included in Exhibit 4.2 hereto).
|
10.1
|
|
|
Restated License Agreement, dated November 1, 1994, by and between Standard & Poor's Financial Services LLC (as successor-in-interest to Standard & Poor's, a division of McGraw-Hill, Inc.) and the Chicago Board Options Exchange, Incorporated (the "S&P License Agreement"), incorporated by reference to Exhibit 10.1 to Amendment No. 6 to the Company's Registration Statement on Form S-4 (File No. 333-140574) filed on April 12, 2010.+
|
10.2
|
|
|
Amendment No. 1 to the S&P License Agreement, dated January 15, 1995, incorporated by reference to Exhibit 10.2 to Amendment No. 6 to the Company's Registration Statement on Form S-4 (File No. 333-140574) filed on April 12, 2010.+
|
10.3
|
|
|
Amendment No. 2 to the S&P License Agreement, dated April 1, 1998, incorporated by reference to Exhibit 10.3 to Amendment No. 6 to the Company's Registration Statement on Form S-4 (File No. 333-140574) filed on April 12, 2010.+
|
10.4
|
|
|
Amendment No. 3 to the S&P License Agreement, dated July 28, 2000, incorporated by reference to Exhibit 10.4 to Amendment No. 6 to the Company's Registration Statement on Form S-4 (File No. 333-140574) filed on April 12, 2010.+
|
10.5
|
|
|
Amendment No. 4 to the S&P License Agreement, dated October 27, 2000, incorporated by reference to Exhibit 10.5 to Amendment No. 6 to the Company's Registration Statement on Form S-4 (File No. 333-140574) filed on April 12, 2010.+
|
10.6
|
|
|
Amendment No. 5 to the S&P License Agreement, dated March 1, 2003, incorporated by reference to Exhibit 10.6 to Amendment No. 6 to the Company's Registration Statement on Form S-4 (File No. 333-140574) filed on April 12, 2010.+
|
10.7
|
|
|
Amended and Restated Amendment No. 6 to the S&P License Agreement, dated February 24, 2009, incorporated by reference to Exhibit 10.7 to Amendment No. 6 to the Company's Registration Statement on Form S-4 (File No. 333-140574) filed on April 12, 2010.+
|
10.8
|
|
|
Amended and Restated Amendment No. 7 to the S&P License Agreement, dated February 24, 2009, incorporated by reference to Exhibit 10.8 to Amendment No. 6 to the Company's Registration Statement on Form S-4 (File No. 333-140574) filed on April 12, 2010.+
|
10.9
|
|
|
Amendment No. 8 to the S&P License Agreement, dated January 9, 2005, incorporated by reference to Exhibit 10.9 to Amendment No. 6 to the Company's Registration Statement on Form S-4 (File No. 333-140574) filed on April 12, 2010.+
|
10.10
|
|
|
Amendment No. 10 to the S&P License Agreement, dated June 19, 2009, incorporated by reference to Exhibit 10.10 to Amendment No. 6 to the Company's Registration Statement on Form S-4 (File No. 333-140574) filed on April 12, 2010.+
|
10.11
|
|
|
Amendment No. 11 to the S&P License Agreement, dated as of April 29, 2010, incorporated by reference to Exhibit 10 to the Company's Current Report on Form 8-K (File No. 001-34774) filed on May 11, 2010.+
|
10.12
|
|
|
Chicago Board Options Exchange, Incorporated Executive Retirement Plan, incorporated by reference to Exhibit 10.13 to Amendment No. 4 to the Company's Registration Statement on Form S-4 (File No. 333-140574) filed on August 14, 2009.*
|
10.13
|
|
|
Amendments to the Chicago Board Options Exchange, Incorporated Executive Retirement Plan (Filed herewith).*
|
Exhibit
No.
|
|
Description of Exhibit
|
|
10.14
|
|
|
Chicago Board Options Exchange, Incorporated Supplemental Retirement Plan, incorporated by reference to Exhibit 10.14 to Amendment No. 4 to the Company's Registration Statement on Form S-4 (File No. 333-140574) filed on August 14, 2009.*
|
10.15
|
|
|
Chicago Board Options Exchange, Incorporated Deferred Compensation Plan for Officers, incorporated by reference to Exhibit 10.15 to Amendment No. 4 to the Company's Registration Statement on Form S-4 (File No. 333-140574) filed on August 14, 2009.*
|
10.16
|
|
|
Amendments to the Chicago Board Options Exchange, Incorporated Deferred Compensation Plan for Officers (Filed herewith).*
|
10.17
|
|
|
Amendment No. 1 to the Chicago Board Options Exchange, Incorporated Supplemental Retirement Plan, incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 (File No. 001-34774) filed on November 12, 2010.*
|
10.18
|
|
|
Amendments to the Chicago Board Options Exchange, Incorporated Supplemental Retirement Plan (Filed herewith).*
|
10.19
|
|
|
Amended and Restated CBOE Holdings, Inc. Long-Term Incentive Plan, incorporated by reference to Exhibit 10.20 to Amendment No. 4 to the Company's Registration Statement on Form S-1 (File No. 333-165393) filed on June 11, 2010.*
|
10.20
|
|
|
Form of Restricted Stock Award Agreement (for Executive Officers), incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (File No. 001-34774) filed on June 11, 2010.*
|
10.21
|
|
|
Form of Restricted Stock Award Agreement (for Non-employee Directors), incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (File No. 001-34774) filed on June 11, 2010.*
|
10.22
|
|
|
Amended and Restated CBOE Holdings, Inc. Executive Severance Plan, incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 (File No. 001-34774) filed on May 6, 2015.*
|
10.23
|
|
|
Form of Director Indemnification Agreement, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No. 001-34774) filed on December 20, 2010.
|
10.24
|
|
|
Second Amended and Restated CBOE Holdings, Inc. Long-Term Incentive Plan, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-34774), filed on May 24, 2016.*
|
10.25
|
|
|
Amendment No. 1, dated August 22, 2011, to the Amended and Restated License Agreement, dated September 29, 2006, by and between CME Group Index Services LLC (as successor-in-interest to Dow Jones & Company, Inc.) and the Chicago Board Options Exchange, Incorporated, incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 (File No. 001-34774) filed on November 9, 2011.+
|
10.26
|
|
|
Amended and Restated Employment Agreement, by and among CBOE Holdings, Inc., Chicago Board Options Exchange, Incorporated and Edward T. Tilly, dated December 11, 2012, incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K (File No. 001-34774) filed on December 12, 2012.*
|
10.27
|
|
|
Amendment No. 12, to the S&P License Agreement, dated March 9, 2013, incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q (File no. 001-34774) filed on May 7, 2013. +
|
10.28
|
|
|
Form of Restricted Stock Unit Award Agreement (for Executive Officers) under the Amended and Restated CBOE Holdings, Inc. Long-term Incentive Plan, incorporated by reference to Exhibit 10.27 to the Company's Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 001-34774) filed on February 21, 2014.*
|
10.29
|
|
|
Form of Restricted Stock Unit Award Agreement (relative total shareholder return) under the Amended and Restated CBOE Holdings, Inc. Long-term Incentive Plan, incorporated by reference to Exhibit 10.28 to the Company's Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 001-34774) filed on February 21, 2014.*
|
10.30
|
|
|
Form of Restricted Stock Unit Award Agreement (earnings per share) under the Amended and Restated CBOE Holdings, Inc. Long-term Incentive Plan, incorporated by reference to Exhibit 10.29 to the Company's Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 001-34774) filed on February 21, 2014.*
|
10.31
|
|
|
Form of 2016 Restricted Stock Unit Award Agreement (for Executive Officers) under the Amended and Restated CBOE Holdings, Inc. Long-term Incentive Plan, incorporated by reference to Exhibit 10.30 to the Company's Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 001-34774) filed on February 19, 2016.*
|
10.32
|
|
|
Form of 2016 Restricted Stock Unit Award Agreement (relative total shareholder return) under the Amended and Restated CBOE Holdings, Inc. Long-term Incentive Plan, incorporated by reference to Exhibit 10.31 to the Company's Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 001-34774) filed on February 19, 2016.*
|
Exhibit
No.
|
|
Description of Exhibit
|
|
10.33
|
|
|
Form of 2016 Restricted Stock Unit Award Agreement (earnings per share) under the Amended and Restated CBOE Holdings, Inc. Long-term Incentive Plan, incorporated by reference to Exhibit 10.32 to the Company's Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 001-34774) filed on February 19, 2016.*
|
10.34
|
|
|
Form of 2017 Restricted Stock Unit Award Agreement (for Executive Officers) under the Second Amended and Restated CBOE Holdings, Inc. Long-term Incentive Plan (filed herewith).*
|
10.35
|
|
|
Form of 2017 Restricted Stock Unit Award Agreement (relative total shareholder return) under the Second Amended and Restated CBOE Holdings, Inc. Long-term Incentive Plan (filed herewith).*
|
10.36
|
|
|
Form of Restricted Stock Unit Award Agreement (3 Year Cliff Vest) under the Second Amended and Restated CBOE Holdings, Inc. Long-term Incentive Plan (filed herewith).*
|
10.37
|
|
|
Debt Commitment Letter, dated as of September 25, 2016, by and among CBOE Holdings, Inc., Bank of America, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 001-34774), filed on November 8, 2016.
|
10.38
|
|
|
Form of Voting and Support Agreement between CBOE Holdings, Inc. and the directors and executive officers of Bats Global Markets, Inc., incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-34774), filed on September 28, 2016.
|
10.39
|
|
|
Form of Voting and Support Agreement between Bats Global Markets, Inc. and the directors and executive officers of CBOE Holdings, Inc., incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (File No. 001-34774), filed on September 28, 2016.
|
10.40
|
|
|
Term Loan Credit Agreement, dated as of December 15, 2016, by and among CBOE Holdings, Inc., Bank of America, N.A., as Administrative Agent, certain lenders named therein, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Sole Lead Arranger and Sole Bookrunner, Morgan Stanley MUFG Loan Partners, LLC, as Syndication Agent, and Citibank, N.A., PNC Bank, National Association and JPMorgan Chase Bank, N.A., as Co-Documentation Agents, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-34774), filed on December 20, 2016.
|
10.41
|
|
|
Credit Agreement, dated as of December 15, 2016, by and among CBOE Holdings, Inc., Bank of America, N.A., as Administrative Agent and as Swing Line Lender, certain lenders named therein, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Sole Lead Arranger and Sole Bookrunner, Morgan Stanley MUFG Loan Partners, LLC, as Syndication Agent, and Citibank, N.A., PNC Bank, National Association and JPMorgan Chase Bank, N.A., as Co-Documentation Agents, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-34774), filed on December 20, 2016.
|
21.1
|
|
|
Subsidiaries of CBOE Holdings, Inc. (filed herewith).
|
23.1
|
|
|
Consent of Independent Registered Public Accounting Firm (filed herewith).
|
24.1
|
|
|
Powers of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10-K).
|
31.1
|
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14 (filed herewith).
|
31.2
|
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14 (filed herewith).
|
32.1
|
|
|
Certificate of Chief Executive Officer pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (filed herewith).
|
32.2
|
|
|
Certificate of Chief Financial Officer pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (filed herewith).
|
101.INS
|
|
|
XBRL Instance Document (filed herewith).
|
|
|
|
|
101.SCH
|
|
|
XBRL Taxonomy Extension Schema Document (filed herewith).
|
|
|
|
|
101.CAL
|
|
|
XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).
|
|
|
|
|
101.DEF
|
|
|
XBRL Taxonomy Extension Definition Linkbase (filed herewith).
|
|
|
|
|
101.LAB
|
|
|
XBRL Taxonomy Extension Label Linkbase Document (filed herewith).
|
|
|
|
|
101.PRE
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).
|
CBOE HOLDINGS, INC.
(Registrant)
|
||
By:
|
|
/s/ EDWARD T. TILLY
|
|
|
Edward T. Tilly
Chief Executive Officer
|
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
/s/ EDWARD T. TILLY
|
|
Chief Executive Officer and Director
|
|
February 21, 2017
|
Edward T. Tilly
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ ALAN J. DEAN
|
|
Executive Vice President, Chief Financial Officer and Treasurer
|
|
February 21, 2017
|
Alan J. Dean
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ DAVID S. REYNOLDS
|
|
Vice President and Chief Accounting Officer
|
|
February 21, 2017
|
David S. Reynolds
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ WILLIAM J. BRODSKY
|
|
Chairman
|
|
February 21, 2017
|
William J. Brodsky
|
|
|
|
|
|
|
|
|
|
/s/ JAMES R. BORIS
|
|
Director
|
|
February 21, 2017
|
James R. Boris
|
|
|
|
|
|
|
|
|
|
/s/ FRANK E. ENGLISH, JR.
|
|
Director
|
|
February 21, 2017
|
Frank E. English, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ WILLIAM M. FARROW III
|
|
Director
|
|
February 21, 2017
|
William M. Farrow III
|
|
|
|
|
|
|
|
|
|
/s/ EDWARD J. FITZPATRICK
|
|
Director
|
|
February 21, 2017
|
Edward J. Fitzpatrick
|
|
|
|
|
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
/s/ JANET P. FROETSCHER
|
|
Director
|
|
February 21, 2017
|
Janet P. Froetscher
|
|
|
|
|
|
|
|
|
|
/s/ JILL R. GOODMAN
|
|
Director
|
|
February 21, 2017
|
Jill R. Goodman
|
|
|
|
|
|
|
|
|
|
/s/ R. EDEN MARTIN
|
|
Director
|
|
February 21, 2017
|
R. Eden Martin
|
|
|
|
|
|
|
|
|
|
/s/ RODERICK A. PALMORE
|
|
Director
|
|
February 21, 2017
|
Roderick A. Palmore
|
|
|
|
|
|
|
|
|
|
/s/ SUSAN M. PHILLIPS
|
|
Director
|
|
February 21, 2017
|
Susan M. Phillips
|
|
|
|
|
|
|
|
|
|
/s/ SAMUEL K. SKINNER
|
|
Director
|
|
February 21, 2017
|
Samuel K. Skinner
|
|
|
|
|
|
|
|
|
|
/s/ CAROLE E. STONE
|
|
Director
|
|
February 21, 2017
|
Carole E. Stone
|
|
|
|
|
|
|
|
|
|
/s/ EUGENE S. SUNSHINE
|
|
Director
|
|
February 21, 2017
|
Eugene S. Sunshine
|
|
|
|
|
(a)
|
Name of Plan:
|
Section Amended
|
Effective Date
|
Attachment B
|
01/01/2012
|
|
|
|
|
|
|
Section Amended
|
Effective Date
|
Attachment B
|
01/01/2012
|
|
|
|
|
|
|
(a)
|
Superseding Provision(s) - The following provisions supersede other provisions of this Adoption Agreement and/or the Basic Plan Document as described below:
|
Employee Name
|
Employee Job Title
|
Alan Dean
|
EVP, Finance & Administration and CFO
|
Joanne Moffic-Silver
|
EVP-General Counsel & Corp Secretary
|
Gerry O’Connell
|
EVO and CIO
|
Ed Provost
|
President and COO
|
Phil Slocum
|
EVP, Chief Risk Officer
|
Ed Tilly
|
CEO
|
(a)
|
Name of Plan:
|
Section Amended
|
Effective Date
|
Attachment B
|
01/01/2012
|
|
|
|
|
|
|
Section Amended
|
Effective Date
|
Attachment B
|
01/01/2012
|
|
|
|
|
|
|
(a)
|
Name of Plan:
|
(a)
|
Deferral Contributions
(Complete all that apply)
:
|
(1)
R
|
Deferral Contributions. Subject to any minimum or maximum deferral amount provided below, the Employer shall make a Deferral Contribution in accordance with, and subject to, Section 4.01 on behalf of each Participant who has an executed salary reduction agreement in effect with the Employer for the applicable calendar year (or portion of the applicable calendar year).
|
Deferral Contributions
Type of Compensation
|
Dollar Amount
|
% Amount
|
||
Min
|
Max
|
Min
|
Max
|
|
Base Compensation
|
|
|
0
|
50
|
(2)
R
|
Deferral Contributions with respect to Bonus Compensation only. The
|
Deferral Contributions Type of Bonus
|
Treated As
|
Dollar Amount
|
% Amount
|
|||
Performance Based
|
Non· Performance Based
|
Min
|
Max
|
Min
|
Max
|
|
Bonus Compensation
|
Yes
|
|
|
|
0
|
50
|
Section Amended
|
Effective Date
|
1.05(a)(1)
|
8/1/2015
|
1.05(a)(2)
|
8/1/2015
|
|
|
|
|
Section Amended
|
Effective Date
|
1.05(a)(1)
|
8/1/2015
|
1.05(a)(2)
|
8/1/2015
|
|
|
|
|
(a)
|
Deferral Contributions
(Complete all that apply)
:
|
Deferral Contributions
Type of Compensation
|
Dollar Amount
|
% Amount
|
||
Min
|
Max
|
Min
|
Max
|
|
Base Compensation
|
|
|
0
|
13
|
Deferral Contributions Type of Bonus
|
Treated As
|
Dollar Amount
|
% Amount
|
|||
Performance Based
|
Non· Performance Based
|
Min
|
Max
|
Min
|
Max
|
|
Bonus Compensation
|
Yes
|
|
|
|
0
|
13
|
(1)
R
|
The Employer shall make a Matching Contribution on behalf of each Employee Participant
|
(2)
□
|
Matching Contribution Offset. For each Employee Participant who has made elective contributions (as defined in 26 CFR section l .40l(k)-6 ("QP Deferrals")) of the maximum permitted under Code section 402(g), or the maximum permitted under the terms of the ________________________________________ Plan (the "QP"), to the QP, the Employer shall make a Matching Contribution in an amount equal to (A) minus (B) below:
|
(A)
|
The matching contributions (as defined in 26 CFR section l.40 l (m)-l(a)(2) ("QP Match")) that the Employee Participant would have received under the QP on the sum of the Deferral Contributions and the Participant's QP Deferrals, determined as though-
|
•
|
no limits otherwise imposed by the tax law applied to such QP match; and
|
•
|
the Employee Participant's Deferral Contributions had been made to the QP.
|
(B)
|
The QP Match actually made to such Employee Participant under the QP for the applicable calendar year.
|
(2)
R
|
Discretionary Employer Contributions. The Employer may make Employer Contributions to the accounts of Employee Participants in any amount (which amount may be zero), as determined by the Employer in its sole discretion from time to time in a writing, which is hereby incorporated herein.
|
Section Amended
|
Effective Date
|
Match
|
07/01/2011
|
|
|
|
|
Section Amended
|
Effective Date
|
Match
|
07/01/2011
|
|
|
|
|
(a)
|
Deferral Contributions
(Complete all that apply)
:
|
Deferral Contributions
Type of Compensation
|
Dollar Amount
|
% Amount
|
||
Min
|
Max
|
Min
|
Max
|
|
Base Compensation
|
|
|
0
|
13
|
Deferral Contributions Type of Bonus
|
Treated As
|
Dollar Amount
|
% Amount
|
|||
Performance Based
|
Non· Performance Based
|
Min
|
Max
|
Min
|
Max
|
|
Bonus Compensation
|
Yes
|
|
|
|
0
|
13
|
(1)
R
|
The Employer shall make a Matching Contribution on behalf of each Employee Participant
|
(2)
□
|
Matching Contribution Offset. For each Employee Participant who has made elective contributions (as defined in 26 CFR section l .40l(k)-6 ("QP Deferrals")) of the maximum permitted under Code section 402(g), or the maximum permitted under the terms of the ________________________________________ Plan (the "QP"), to the QP, the Employer shall make a Matching Contribution in an amount equal to (A) minus (B) below:
|
(A)
|
The matching contributions (as defined in 26 CFR section l.40 l (m)-l(a)(2) ("QP Match")) that the Employee Participant would have received under the QP on the sum of the Deferral Contributions and the Participant's QP Deferrals, determined as though-
|
•
|
no limits otherwise imposed by the tax law applied to such QP match; and
|
•
|
the Employee Participant's Deferral Contributions had been made to the QP.
|
(B)
|
The QP Match actually made to such Employee Participant under the QP for the applicable calendar year.
|
(2)
R
|
Discretionary Employer Contributions. The Employer may make Employer Contributions to the accounts of Employee Participants in any amount (which amount may be zero), as determined by the Employer in its sole discretion from time to time in a writing, which is hereby incorporated herein.
|
Section Amended
|
Effective Date
|
1.05(b)(1)(A)
|
09/01/2011
|
|
|
|
|
Section Amended
|
Effective Date
|
1.05(b)(1)(A)
|
09/01/2011
|
|
|
|
|
(a)
|
Name of Plan:
|
Section Amended
|
Effective Date
|
Attachment B
|
01/01/2012
|
|
|
|
|
|
|
Section Amended
|
Effective Date
|
Attachment B
|
01/01/2012
|
|
|
|
|
|
|
(a)
|
Superseding Provision(s) - The following provisions supersede other provisions of this
|
(a)
|
Name of Plan:
|
(a)
|
Employer Name:
Chicago Board Options Exchange, Inc.
|
(b)
|
The term “Employer” includes the following Related Employer(s)
|
Section Amended
|
Effective Date
|
1.02(b)
|
07/01/2013
|
|
|
|
|
|
|
Section Amended
|
Effective Date
|
1.02(b)
|
07/01/2013
|
|
|
|
|
|
|
(a)
|
Name of Plan:
|
(1)
R
|
Deferral Contributions. Subject to any minimum or maximum deferral amount provided below, the Employer shall make a Deferral Contribution in accordance with, and subject to, Section 4.01 on behalf of each Participant who has an executed salary reduction agreement in effect with the Employer for the applicable calendar year (or portion of the applicable calendar year).
|
Deferral Contributions
Type of Compensation
|
Dollar Amount
|
% Amount
|
||
Min
|
Max
|
Min
|
Max
|
|
Base Compensation
|
|
|
0
|
20
|
Deferral Contributions
Type of Bonus
|
Treated As
|
Dollar Amount
|
% Amount
|
|||
Performance Based
|
Non· Performance Based
|
Min
|
Max
|
Min
|
Max
|
|
Bonus Compensation
|
Yes
|
|
|
|
0
|
20
|
Section Amended
|
Effective Date
|
1.05(a)(1)
|
01/01/2014
|
1.05(a)(2)
|
01/01/2014
|
|
|
|
|
Section Amended
|
Effective Date
|
1.05(a)(1)
|
01/01/2014
|
1.05(a)(2)
|
01/01/2014
|
|
|
|
|
(1)
|
R
The Employer shall make a Matching Contribution on behalf of each Employee
|
(2)
□
|
Matching Contribution Offset. For each Employee Participant who has made elective contributions (as defined in 26 CFR section l .40l(k)-6 ("QP Deferrals")) of the maximum permitted under Code section 402(g), or the maximum permitted under the terms of the _____________________________ Plan (the "QP"), to the QP, the Employer shall make a Matching Contribution in an amount equal to (A) minus (B) below:
|
(A)
|
The matching contributions (as defined in 26 CFR section l.40l (m)-1(a)(2) ("QP Match")) that the Employee Participant would have received under the QP on the sum of the Deferral Contributions and the Participant's QP Deferrals, determined as though-
|
•
|
no limits otherwise imposed by the tax law applied to such QP
|
•
|
the Employee Participant's Deferral Contributions had been made to
|
Section Amended
|
Effective Date
|
1.05(b)(1)(A)
|
05/01/2015
|
|
|
|
|
|
|
Section Amended
|
Effective Date
|
1.05(b)(1)(A)
|
05/01/2015
|
|
|
|
|
|
|
(1)
R
|
Deferral Contributions. Subject to any minimum or maximum deferral amount provided below, the Employer shall make a Deferral Contribution in accordance with, and subject to, Section 4.01 on behalf of each Participant who has an executed salary reduction agreement in effect with the Employer for the applicable calendar year (or portion of the applicable calendar year).
|
Deferral Contributions
Type of Compensation
|
Dollar Amount
|
% Amount
|
||
Min
|
Max
|
Min
|
Max
|
|
Base Compensation
|
|
|
0
|
50
|
Deferral Contributions
Type of Bonus
|
Treated As
|
Dollar Amount
|
% Amount
|
|||
Performance Based
|
Non· Performance Based
|
Min
|
Max
|
Min
|
Max
|
|
Bonus Compensation
|
Yes
|
|
|
|
0
|
50
|
Section Amended
|
Effective Date
|
1.05(a)(1)
|
8/1/2015
|
1.05(a)(2)
|
8/1/2015
|
|
|
|
|
1.
|
Award
. The Corporation hereby awards to Participant [__________] Restricted Stock Units (the “
Restricted Stock Units
”). The Restricted Stock Units will be subject to the terms and conditions of the Plan and this Agreement. Each Restricted Stock Unit is a notional amount that represents one unvested share of Stock and entitles Participant, subject to the terms of this Agreement, to receive a share of Stock if and when the Restricted Stock Unit vests.
|
2.
|
No Rights as Stockholder; Dividend Equivalents
. Participant shall have no voting rights with respect to shares of Stock represented by Restricted Stock Units until the date of the issuance of the shares of Stock (as evidenced by the appropriate entry on the books of the Corporation or of a duly authorized transfer agent of the Corporation). Notwithstanding the foregoing, in the event that the Corporation declares a cash dividend on shares of Stock, on the payment date of the dividend, Participant will be credited with Dividend Equivalent Rights equal to the amount of the cash dividend per share multiplied by the number of Restricted Stock Units held by Participant on the dividend’s record date. The Dividend Equivalent Rights credited to Participant under the preceding sentence will be distributed to Participant at the same time as the underlying cash dividend is distributed to shareholders of the Corporation.
|
3.
|
Vesting; Effect of Termination of Service
.
|
4.
|
Terms and Conditions of Distribution
.
|
5.
|
Nontransferability
. Unvested Restricted Stock Units may not be sold, transferred, exchanged, pledged, assigned, garnished, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Any effort to assign or transfer the rights under this Agreement will be wholly ineffective, and will be grounds for termination by the Committee of all rights of Participant under this Agreement.
|
6.
|
Administration
. The Committee administers the Plan. Participant’s rights under this Agreement are expressly subject to the terms and conditions of the Plan and to any guidelines the Committee adopts from time to time. The interpretation and construction by the Committee of the Plan and this Agreement, and such rules and regulations as may be adopted by the Committee for purposes of administering the Plan and this Agreement, will be final and binding upon Participant.
|
7.
|
Securities Law Requirements
. If at any time the Board or Committee determines that issuing Stock pursuant to this Agreement would violate applicable securities laws, the Corporation will not be required to issue such Stock. The Board or Committee may declare any provision of this Agreement or action of its own null and void, if it determines the provision or action fails to comply with applicable securities laws. The Corporation may require Participant to make written representations it deems necessary or desirable to comply with applicable securities laws.
|
8.
|
Payment of Withholding Taxes
. Distribution to Participant of shares of Stock under this Agreement will be subject to Federal income and other tax withholding (and state and local income tax withholding, or non-U.S. tax withholding, if applicable) by the Corporation in respect of taxes on income realized by Participant. The Corporation may withhold the minimum statutorily required amounts from future paychecks to Participant, or may require that Participant deliver to the Corporation the amounts to be withheld. Participant agrees to allow the Corporation, upon any payment of shares of Stock to Participant under this Agreement, to withhold a portion of the shares of Stock otherwise deliverable to Participant having a Fair Market Value of the minimum tax withholding obligation (or, in the discretion of the Corporation, to satisfy up to the maximum tax withholding obligation), in satisfaction of any Federal income and other tax withholding (and any state and local income tax withholding, or non-U.S. tax withholding, if applicable). Notwithstanding any provision herein to the contrary, in the event that any Restricted Stock Units become subject to tax withholding before the shares of Stock subject to the Restricted Stock Units would otherwise be delivered to the Participant, the Corporation may issue a sufficient number of whole shares of Stock with respect to the Restricted Stock Units that does not exceed the minimum tax withholding obligation, which shares of Stock shall be withheld by the Corporation to satisfy its withholding obligation, in accordance with and subject to the requirements of Section 409A.
|
9.
|
Restrictive Covenants
. Participant understands the global nature of the Corporation’s businesses and the effort the Corporation and the Chicago Board Options Exchange, Incorporated (together referred to in this Section as the “
CBOE
”) undertake to develop and protect their business and their competitive advantage. Accordingly, Participant agrees that the scope and duration of the restrictions described in this Agreement are reasonable and necessary to protect the legitimate business interests of the CBOE. Participant further agrees that during the period of Participant’s Service and for a period of two (2) years following Participant’s separation from Service, Participant shall not:
|
10.
|
Confidentiality
. Participant acknowledges that the Corporation or an Affiliate may disclose secret or confidential information to Participant during the period of Participant’s Service to enable Participant to perform his or her duties. Participant agrees that, subject to the following sentence, Participant shall not during his or her Service (except in connection with the proper performance of his or her duties) and thereafter, without the prior written consent of the Corporation, disclose to any person or entity any material or significant secret or confidential information concerning the business of the Corporation or an Affiliate that was obtained by Participant in the course of Participant’s Service. This paragraph shall not be applicable if and to the extent Participant is required to testify in a legislative, judicial or regulatory proceeding pursuant to an order of Congress, any state or local legislature, a judge, or an administrative law judge, or if such secret or confidential information is required to be disclosed by Participant by any law, regulation or order of any court or regulatory commission, department or agency. Participant further agrees that if Participant’s Service is terminated for any reason, Participant will not take, but will leave with the Corporation or an Affiliate, all records and papers and all matter of whatever nature that bears secret or confidential information of the Corporation or an Affiliate. For purposes of this Agreement, the term “secret or confidential information” shall include, but not be limited to, any and all records, notes, memoranda, data, writings, research, personnel information, customer information, clearing members’ information, the Corporation’s and any Affiliate’s financial information and plans, processes, methods, techniques, systems, formulas, patents, models, devices, compilations or any other information of whatever nature in the possession or control of the Corporation or an Affiliate, that has not been published or disclosed to the general public, the options industry or the commodities futures industry, provided that such term shall not include knowledge, skills, and information that is common to the trade or profession of Participant.
|
11.
|
Judicial Modification
. If the final judgment of a court of competent jurisdiction declares that any term or provision of Section 9 or 10 is invalid or unenforceable, the parties agree that (a) the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or geographic area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, (b) the parties shall request that the court exercise that power, and (c) this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment or decision may be appealed.
|
12.
|
Remedies
. Participant agrees that in the event of a breach or threatened breach of any of the covenants contained in Sections 9 or 10 of this Agreement, in addition to any other penalties or restrictions that may apply under any employment agreement, state law, or otherwise, Participant shall forfeit, upon written notice to such effect from the Corporation, any and all Awards granted to him or her under the Plan and this Agreement, including vested Awards. The forfeiture provisions of this Section 12 shall continue to apply, in accordance with their terms, after the provisions of any employment or other agreement between the Corporation and Participant have lapsed. Participant consents and agrees that if Participant violates or threatens to violate any provisions of Sections 9 or 10 of this Agreement, the Corporation or its successors in interest shall be entitled, in addition to any other remedies that they may have, including money damages, to an injunction to be issued by a court of competent jurisdiction restraining Participant from committing or continuing any violation of Sections 9 or 10. In the event that Participant is found to have breached any provision set forth in Section 9 of this Agreement, the time period provided for in that provision shall be deemed tolled (
i.e.
, it will not begin to run) for as long as Participant was in violation of that provision.
|
13.
|
Representations and Warranties
. Participant represents and warrants to the Corporation that Participant has received a copy of the Plan and this Agreement, has read and understands the terms of the Plan and this Agreement, and agrees to be bound by their terms and conditions in all respects.
|
14.
|
No Limitation on the Corporation’s Rights
. The granting of Restricted Stock Units under this Agreement shall not and will not in any way affect the Corporation’s right or power to make adjustments, reclassifications or changes in its capital or business structure or to merge, consolidate, reincorporate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
|
15.
|
Plan and Agreement Not a Contract of Employment or Service
. Neither the Plan nor this Agreement is a contract of employment or Service, and no terms of Participant’s employment or Service will be affected in any way by the Plan, this Agreement or related instruments, except to the extent specifically expressed therein. Neither the Plan nor this Agreement will be construed as conferring any legal rights of Participant to continue to be employed or remain in Service, nor will it interfere with the Corporation’s or any Affiliate’s right to discharge Participant or to deal with Participant regardless of the existence of the Plan or this Agreement.
|
16.
|
Entire Agreement and Amendment
. This Agreement and the Plan constitute the entire agreement between the parties hereto with respect to the Restricted Stock Units, and all prior oral and written representations are merged in this Agreement and the Plan. Notwithstanding the preceding sentence, this Agreement shall not in any way affect the terms and provisions of the Plan. This Agreement may
|
17.
|
Notice
. Any notice or other communication required or permitted under this Agreement must be in writing and must be delivered personally, sent by certified, registered or express mail, sent by overnight courier (at the sender’s expense), or (if from the Corporation or the Corporation’s stock plan administrator) by electronic mail. Notice will be deemed given (a) when delivered personally, (b) if mailed, three days after the date of deposit in the U.S. mail, (c) if sent by overnight courier, on the regular business day following the date sent, or (d) when electronically mailed. Notice to the Corporation should be sent to CBOE Holdings, Inc., 400 South LaSalle Street, Chicago, Illinois 60605, Attention: General Counsel. Notice to Participant should be sent to the mailing address and/or electronic mailing address set forth on the Corporation’s records. Either party may change the address to which the other party must give notice under this Section 17 by giving the other party written notice of such change, in accordance with the procedures described above or otherwise established by the Corporation or its stock plan administrator.
|
18.
|
Successors and Assigns
. The terms of this Agreement will be binding upon the Corporation and its successors and assigns.
|
19.
|
Governing Law
. To the extent not preempted by Federal law, the Plan, this Agreement, and documents evidencing rights relating to the Plan or this Agreement will be construed, administered and governed in all respects under and by the laws of the State of Delaware, without giving effect to its conflict of laws principles. If any provision of this Agreement will be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof will continue to be fully effective. The jurisdiction and venue for any disputes arising under, or any action brought to enforce (or otherwise relating to), this Agreement will be exclusively in the courts in the State of Illinois, County of Cook, including the Federal Courts located therein (should Federal jurisdiction exist).
|
20.
|
Plan Document Controls
. The rights granted under this Agreement are in all respects subject to the provisions set forth in the Plan to the same extent and with the same effect as if set forth fully in this Agreement. If the terms of this Agreement conflict with the terms of the Plan document, the Plan document will control.
|
21.
|
Counterparts
. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument.
|
22.
|
Waiver; Cumulative Rights
. The failure or delay of either party to require performance by the other party of any provision of this Agreement will not affect its right to require performance of such provision unless and until such performance has been waived in writing. Each right under this Agreement is cumulative and may be exercised in part or in whole from time to time.
|
23.
|
Tax Consequences
.
Participant agrees to determine and be responsible for all tax consequences to Participant with respect to the Restricted Stock Units.
|
24.
|
Section 409A
.
The Restricted Stock Units granted hereunder are intended to comply with, or otherwise be exempt from, Section 409A, including the exceptions and exemptions for short term deferrals, stock rights, and separation pay arrangements. This Agreement and all Restricted Stock Units shall
|
25.
|
Awards Subject to the Corporation’s Recovery of Funds Policy
. Notwithstanding anything in this Agreement to the contrary, the Restricted Stock Units covered by this Agreement shall be subject to the Corporation’s compensation recovery policy, as may be in effect from time to time, including, without limitation, the provisions of any such policy required by Section 10D of the Exchange Act and any applicable rules or regulations issued by the SEC or any national securities exchange or national securities association on which the Stock may be traded.
|
26.
|
Addendum to Agreement.
Notwithstanding any provision of this Agreement to the contrary, if Participant resides or is employed outside the U.S. or transfers residence or employment outside the U.S., the Restricted Stock Units shall be subject to such special terms and conditions as are set forth in the addendum to this agreement (the “
Addendum
”). Further, if Participant transfers residency and/or employment to another country, any special terms and conditions for such country will apply to the Restricted Stock Units to the extent the Corporation determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable in order to comply with local law or to facilitate the operation and administration of the Restricted Stock Units and the Plan (or the Corporation may establish alternative terms and conditions as may be necessary or advisable to accommodate Participant’s transfer). In all circumstances, the Addendum shall constitute part of this Agreement.
|
_________________________________
|
|
|
Participant’s Name
|
|
|
_________________________________
|
|
|
Participant’s Signature
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
Nature of Grant
. In accepting the Restricted Stock Units, Participant acknowledges that:
|
2.
|
Participants in the European Union
. If Participant resides and/or is employed in a European Union member state, the following provision shall replace Section 3(b) of the Agreement in its entirety and any other provisions regarding Retirement Vesting shall be disregarded and of no effect:
|
3.
|
Payment of Withholding Taxes
. Participant acknowledges and agrees that if Participant is subject to tax and/or social contributions in more than one jurisdiction, the Corporation or its Affiliate(s) may be required to withhold or account for taxes and/or social contributions in more than one jurisdiction, in accordance with the methods of withholding described in Section 8 of the Agreement.
|
4.
|
Data Privacy
. Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Agreement and any other Restricted Stock Unit grant materials by and among, as applicable, the Employer, the Corporation, and its Affiliates for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan.
|
5.
|
No Advice Regarding Grant
.
The Corporation is not providing any tax, legal or financial advice, nor is the Corporation making any recommendations regarding Participant’s participation in the Plan, or Participant’s acquisition or sale of the underlying shares of Stock. Participant should consult with his or her own personal tax, legal and financial advisors regarding Participant’s participation in the Plan before taking any action related to the Plan.
|
6.
|
Imposition of Other Requirements
.
The Corporation reserves the right to impose other requirements on Participant’s participation in the Plan, on the Restricted Stock Units and on any shares of Stock acquired under the Plan, to the extent the Corporation determines it is necessary or advisable for legal or administrative reasons. Such requirements may include (but are not limited to) requiring Participant to sign any agreements or undertakings that may be necessary to accomplish the foregoing.
|
7.
|
Insider Trading/Market Abuse Laws
.
Participant acknowledges that Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including the United States and Participant’s country, which may affect Participant’s ability to acquire or sell shares of Stock or rights to shares of Stock (e.g., Restricted Stock Units) under the Plan during such times as Participant is considered to have “inside information” regarding the Corporation (as defined by the laws in Participant’s country). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Corporation insider trading policy. Participant acknowledges that it is his or her responsibility to be informed of and compliant with such regulations, and should speak to his or her personal advisor on this matter.
|
8.
|
Foreign Asset/Account Reporting; Exchange Controls
.
Participant’s country may have certain foreign asset and/or account reporting requirements and/or exchange controls which may affect Participant’s ability to acquire or hold shares of Stock under the Plan or cash received from participating in the Plan (including from any dividends received or sale proceeds arising from the sale of shares of Stock) in a brokerage or bank account outside Participant’s country. Participant may be required to report such accounts, assets or transactions to the tax or other authorities in his or her country. Participant also may be required to repatriate sale proceeds or other funds received as a result of Participant’s participation in the Plan to his or her country through a designated bank or broker and/or within a certain time after receipt. Participant acknowledges that it is his or her responsibility to be compliant with such regulations, and Participant should consult his or her personal legal advisor for any details.
|
9.
|
Annex to Addendum
. Notwithstanding any provision of the Agreement or Addendum to the contrary, the Restricted Stock Units shall be subject to such special terms and conditions for Participant’s country of residence (and country of employment, if different), as are set forth in the annex to this Addendum (the “
Annex
”). Further, if Participant transfers residency and/or employment to another country, the Corporation may establish alternative terms and conditions as may be necessary or advisable to accommodate Participant’s transfer. In all circumstances, the Annex shall constitute part of this Addendum.
|
1.
|
Payment of Withholding Taxes
. The following provision supplements Section 8 of the Agreement:
|
2.
|
Exclusion of Claim
. Participant acknowledges and agrees that Participant will have no entitlement to compensation or damages insofar as such entitlement arises or may arise from Participant’s ceasing to have rights under or to be entitled to the Restricted Stock Units, whether or not as a result of termination of Service (whether such termination is in breach of contract or otherwise), or from the loss or diminution in value of the Restricted Stock Units. Upon the award of the Restricted Stock Units, Participant shall be deemed irrevocably to have waived any such entitlement.
|
3.
|
Exit from the European Union
. Should the United Kingdom exit the European Union, the terms of Section 2 of the Addendum (Participants in the European Union) shall continue to apply to the Restricted Stock Units unless otherwise determined by the Corporation, in its sole discretion. Alternatively, the Corporation may establish alternative terms and conditions as may be necessary or advisable to comply with applicable law.
|
1.
|
Award
. The Corporation hereby awards to Participant [___] Restricted Stock Units (the “
Restricted Stock Units
”). The Restricted Stock Units will be subject to the terms and conditions of the Plan and this Agreement. Each Restricted Stock Unit is a notional amount that represents one unvested share of Stock and entitles Participant, subject to the terms of this Agreement, to receive a share of Stock if and when the Restricted Stock Unit vests.
|
2.
|
No Rights as Stockholder; Dividend Equivalents
. Participant shall have no voting rights with respect to shares of Stock represented by Restricted Stock Units until the date of the issuance of the shares of Stock (as evidenced by the appropriate entry on the books of the Corporation or of a duly authorized transfer agent of the Corporation). Notwithstanding the foregoing, in the event that the Corporation declares a cash dividend on shares of Stock, on the payment date of the dividend, Participant will be credited with Dividend Equivalent Rights equal to the amount of the cash dividend per share multiplied by the number of Restricted Stock Units held by Participant on the dividend’s record date. The Dividend Equivalent Rights credited to Participant under the preceding sentence will be deemed to be reinvested in additional Restricted Stock Units, which will be subject to the same terms regarding vesting, forfeiture, and distribution as Restricted Stock Units awarded to Participant under this Agreement.
|
3.
|
Performance Period
. The Performance Period for the Restricted Stock Units shall be the three (3) year period commencing on [__________] and ending on [_________].
|
4.
|
Vesting; Effect of Termination of Service
.
|
5.
|
Terms and Conditions of Distribution
.
|
6.
|
Nontransferability
. Unvested Restricted Stock Units may not be sold, transferred, exchanged, pledged, assigned, garnished, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Any effort to assign or transfer the rights under this Agreement will be wholly ineffective, and will be grounds for termination by the Committee of all rights of Participant under this Agreement.
|
7.
|
Administration
. The Committee administers the Plan. Participant’s rights under this Agreement are expressly subject to the terms and conditions of the Plan and to any guidelines the Committee adopts from time to time. The interpretation and construction by the Committee of the Plan and this Agreement, and such rules and regulations as may be adopted by the Committee for purposes of administering the Plan and this Agreement, will be final and binding upon Participant.
|
8.
|
Securities Law Requirements
. If at any time the Board or Committee determines that issuing Stock pursuant to this Agreement would violate applicable securities laws, the Corporation will not be required to issue such Stock. The Board or Committee may declare any provision of this Agreement or action of its own null and void, if it determines the provision or action fails to comply with applicable securities laws. The Corporation may require Participant to make written representations it deems necessary or desirable to comply with applicable securities laws.
|
9.
|
Payment of Withholding Taxes
. Distribution to Participant of shares of Stock under this Agreement will be subject to Federal income and other tax withholding (and state and local income tax withholding, or non-U.S. tax withholding, if applicable) by the Corporation in respect of taxes on income realized by Participant. The Corporation may withhold the minimum statutorily required amounts from future paychecks to Participant, or may require that Participant deliver to the Corporation the amounts to be withheld. Participant agrees to allow the Corporation, upon any payment of shares of Stock to Participant under this Agreement, to withhold a portion of the shares of Stock otherwise deliverable to Participant having a Fair Market Value of the tax withholding obligation (or, in the discretion of the Corporation, to satisfy up to the maximum tax withholding obligation), in satisfaction of any Federal income and other tax withholding (and any state and local income tax withholding, or non-U.S. tax withholding, if applicable). Notwithstanding any provision herein to the contrary, in the event that any Restricted Stock Units become subject to tax withholding before the shares of Stock subject to the Restricted Stock Units would otherwise be delivered to the Participant, the Corporation may issue a sufficient number of whole shares of Stock with respect to the Restricted Stock Units that does not exceed the minimum tax withholding obligation, which shares of Stock shall be withheld by the Corporation to satisfy its withholding obligation, in accordance with and subject to the requirements of Section 409A.
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10.
|
Restrictive Covenants
. Participant understands the global nature of the Corporation’s businesses and the effort the Corporation and the Chicago Board Options Exchange, Incorporated (together referred to in this Section as the “
CBOE
”) undertake to develop and protect their business and their competitive advantage. Accordingly, Participant agrees that the scope and duration of the restrictions described in this Agreement are reasonable and necessary to protect the legitimate business interests of the CBOE. Participant further agrees that during the period of Participant’s Service and for a period of two (2) years following Participant’s separation from Service, Participant shall not:
|
11.
|
Confidentiality
. Participant acknowledges that the Corporation or an Affiliate may disclose secret or confidential information to Participant during the period of Participant’s Service to enable Participant to perform his or her duties. Participant agrees that, subject to the following sentence, Participant shall not during his or her Service (except in connection with the proper performance of his or her duties) and thereafter, without the prior written consent of the Corporation, disclose to any person or entity any material or significant secret or confidential information concerning the business of the Corporation or an Affiliate that was obtained by Participant in the course of Participant’s Service. This paragraph shall not be applicable if and to the extent Participant is required to testify in a legislative, judicial or regulatory proceeding pursuant to an order of Congress, any state or local legislature, a judge, or an administrative law judge, or if such secret or confidential information is required to be disclosed by Participant by any law, regulation or order of any court or regulatory commission, department or agency. Participant further agrees that if Participant’s Service is terminated for any reason, Participant will not take, but will leave with the Corporation or an Affiliate, all records and papers and all matter of whatever nature that bears secret or confidential information of the Corporation or an Affiliate. For purposes of this Agreement, the term “secret or confidential information” shall include, but not be limited to, any and all records, notes, memoranda, data, writings, research, personnel information, customer information, clearing members’ information, the Corporation’s and any Affiliate’s financial information and plans, processes, methods, techniques, systems, formulas, patents, models, devices, compilations or any other information of whatever nature in the possession or control of the Corporation or an Affiliate, that has not been published or disclosed to the general public, the options industry or the commodities futures industry, provided that such term shall not include knowledge, skills, and information that is common to the trade or profession of Participant.
|
12.
|
Judicial Modification
. If the final judgment of a court of competent jurisdiction declares that any term or provision of Section 10 or 11 is invalid or unenforceable, the parties agree that (a) the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or geographic area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, (b) the parties shall request that the court exercise that power, and (c) this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment or decision may be appealed.
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13.
|
Remedies
. Participant agrees that in the event of a breach or threatened breach of any of the covenants contained in Sections 10 or 11 of this Agreement, in addition to any other penalties or restrictions that may apply under any employment agreement, state law, or otherwise, Participant shall forfeit, upon written notice to such effect from the Corporation, any and all Awards granted to him or her under the Plan and this Agreement, including vested Awards. The forfeiture provisions of this Section 13 shall continue to apply, in accordance with their terms, after the provisions of any employment or other agreement between the Corporation and Participant have lapsed. Participant consents and agrees that if Participant violates or threatens to violate any provisions of Sections 10 or 11 of this Agreement, the Corporation or its successors in interest shall be entitled, in addition to any other remedies that they may have, including money damages, to an injunction to be issued by a court of competent jurisdiction restraining Participant from committing or continuing any violation of Sections 10 or 11. In the event that Participant is found to have breached any provision set forth in Section 10 of this Agreement, the time period provided for in that provision shall be deemed tolled (
i.e.
, it will not begin to run) for as long as Participant was in violation of that provision.
|
14.
|
Representations and Warranties
. Participant represents and warrants to the Corporation that Participant has received a copy of the Plan and this Agreement, has read and understands the terms of the Plan and this Agreement, and agrees to be bound by their terms and conditions in all respects.
|
15.
|
No Limitation on the Corporation’s Rights
. The granting of Restricted Stock Units under this Agreement shall not and will not in any way affect the Corporation’s right or power to make adjustments, reclassifications or changes in its capital or business structure or to merge, consolidate, reincorporate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
|
16.
|
Plan and Agreement Not a Contract of Employment or Service
. Neither the Plan nor this Agreement is a contract of employment or Service, and no terms of Participant’s employment or Service will be affected in any way by the Plan, this Agreement or related instruments, except to the extent specifically expressed therein. Neither the Plan nor this Agreement will be construed as conferring any legal rights of Participant to continue to be employed or remain in Service, nor will it interfere with the Corporation’s or any Affiliate’s right to discharge Participant or to deal with Participant regardless of the existence of the Plan or this Agreement.
|
17.
|
Entire Agreement and Amendment
. This Agreement and the Plan constitute the entire agreement between the parties hereto with respect to the Restricted Stock Units, and all prior oral and written representations are merged in this Agreement and the Plan. Notwithstanding the preceding sentence, this Agreement shall not in any way affect the terms and provisions of the Plan. This Agreement may be amended, modified, or terminated only in accordance with the Plan. The headings in this Agreement are inserted for convenience and identification only and are not intended to describe, interpret, define or limit the scope, extent, or intent of this Agreement or any provision hereof.
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18.
|
Notice
. Any notice or other communication required or permitted under this Agreement must be in writing and must be delivered personally, sent by certified, registered or express mail, sent by overnight courier (at the sender’s expense), or (if from the Corporation or the Corporation’s stock plan administrator) by electronic mail. Notice will be deemed given (a) when delivered personally, (b) if mailed, three days after the date of deposit in the U.S. mail, (c) if sent by overnight courier, on the regular business day following the date sent, or (d) when electronically mailed. Notice to the Corporation should be sent to CBOE Holdings, Inc., 400 South LaSalle Street, Chicago, Illinois 60605, Attention: General Counsel. Notice to Participant should be sent to the mailing address and/or electronic mailing address set forth on the Corporation’s records. Either party may change the address to which the other party must give notice under this Section 18 by giving the other party written notice of such change, in accordance with the procedures described above or otherwise established by the Corporation or its stock plan administrator.
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19.
|
Successors and Assigns
. The terms of this Agreement will be binding upon the Corporation and its successors and assigns.
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20.
|
Governing Law
. To the extent not preempted by Federal law, the Plan, this Agreement, and documents evidencing rights relating to the Plan or this Agreement will be construed, administered and governed in all respects under and by the laws of the State of Delaware, without giving effect to its conflict of laws principles. If any provision of this Agreement will be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof will continue to be fully effective. The jurisdiction and venue for any disputes arising under, or any action brought to enforce (or otherwise relating to), this Agreement will be exclusively in the courts in the State of Illinois, County of Cook, including the Federal Courts located therein (should Federal jurisdiction exist).
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21.
|
Plan Document Controls
. The rights granted under this Agreement are in all respects subject to the provisions set forth in the Plan to the same extent and with the same effect as if set forth fully in this Agreement. If the terms of this Agreement conflict with the terms of the Plan document, the Plan document will control.
|
22.
|
Counterparts
. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument.
|
23.
|
Waiver; Cumulative Rights
. The failure or delay of either party to require performance by the other party of any provision of this Agreement will not affect its right to require performance of such provision unless and until such performance has been waived in writing. Each right under this Agreement is cumulative and may be exercised in part or in whole from time to time.
|
24.
|
Tax Consequences
.
Participant agrees to determine and be responsible for all tax consequences to Participant with respect to the Restricted Stock Units.
|
25.
|
Section 409A
.
The Restricted Stock Units granted hereunder are intended to comply with, or otherwise be exempt from, Section 409A, including the exceptions and exemptions for short term deferrals, stock rights, and separation pay arrangements. This Agreement and all Restricted Stock Units shall be administered, interpreted, and construed in a manner consistent with Section 409A. Should any provision of this Agreement, or any other agreement or arrangement contemplated by this Agreement, be found not to comply with, or otherwise be exempt from, the provisions of Section 409A, such provision shall be modified and given effect (retroactively if necessary), in the sole discretion of the Corporation, and without the consent of Participant, in such manner as the Corporation determines to be necessary or appropriate to comply with, or to effectuate an exemption from, Section 409A. Notwithstanding the forgoing, no provision of this Agreement, or any other agreement or arrangement contemplated by this Agreement shall be construed as a guarantee by the Corporation of any particular tax effect to Participant. Each payment made under this Agreement shall be designated as a separate payment within the meaning of Section 409A. Any payment that is subject to Section 409A and payable upon Participant’s termination of employment or other similar event shall not be made unless Participant has experienced a “separation from service” as defined under Section 409A. Any payment subject to Section 409A that is to be made upon a “separation from service” to Participant on any date when he or she is a “specified employee” as defined under Section 409A shall not be paid before the date that is six (6) months following Participant’s “separation from service” or, if earlier, Participant’s death.
|
26.
|
Awards Subject to the Corporation’s Recovery of Funds Policy
. Notwithstanding anything in this Agreement to the contrary, the Restricted Stock Units covered by this Agreement shall be subject to the Corporation’s compensation recovery policy, as may be in effect from time to time, including, without limitation, the provisions of any such policy required by Section 10D of the Exchange Act and any applicable rules or regulations issued by the SEC or any national securities exchange or national securities association on which the Stock may be traded.
|
27.
|
Addendum to Agreement.
Notwithstanding any provision of this Agreement to the contrary, if Participant resides or is employed outside the U.S. or transfers residence or employment outside the U.S., the Restricted Stock Units shall be subject to such special terms and conditions as are set forth in the addendum to this agreement (the “
Addendum
”). Further, if Participant transfers residency and/or employment to another country, any special terms and conditions for such country will apply to the Restricted Stock Units to the extent the Corporation determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable in order to comply with local law or to facilitate the operation and administration of the Restricted Stock Units and the Plan (or the Corporation may establish alternative terms and conditions as may be necessary or advisable to accommodate Participant’s transfer). In all circumstances, the Addendum shall constitute part of this Agreement.
|
_________________________________
|
|
|
Participant’s Name
|
|
|
_________________________________
|
|
|
Participant’s Signature
|
|
|
|
|
|
|
|
|
|
|
|
TSR Percentile Attained
|
Percentage of Restricted Stock Units That Vest
|
[____] percentile (“
Maximum
”) or greater
|
[____]%
|
[____] percentile (“
Target
”)
|
[____]%
|
[____] percentile (“
Threshold
”)
|
[____]%
|
1.
|
Nature of Grant
. In accepting the Restricted Stock Units, Participant acknowledges that:
|
2.
|
Participants in the European Union
. If Participant resides and/or is employed in a European Union member state, the following provision shall replace Section 3(b) of the Agreement in its entirety and any other provisions regarding Retirement Vesting shall be disregarded and of no effect:
|
3.
|
Payment of Withholding Taxes
. Participant acknowledges and agrees that if Participant is subject to tax and/or social contributions in more than one jurisdiction, the Corporation or its Affiliate(s) may be required to withhold or account for taxes and/or social contributions in more than one jurisdiction, in accordance with the methods of withholding described in Section 8 of the Agreement.
|
4.
|
Data Privacy
. Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Agreement and any other Restricted Stock Unit grant materials by and among, as applicable, the Employer, the Corporation, and its Affiliates for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan.
|
5.
|
No Advice Regarding Grant
.
The Corporation is not providing any tax, legal or financial advice, nor is the Corporation making any recommendations regarding Participant’s participation in the Plan, or Participant’s acquisition or sale of the underlying shares of Stock. Participant should consult with his or her own personal tax, legal and financial advisors regarding Participant’s participation in the Plan before taking any action related to the Plan.
|
6.
|
Imposition of Other Requirements
.
The Corporation reserves the right to impose other requirements on Participant’s participation in the Plan, on the Restricted Stock Units and on any shares of Stock acquired under the Plan, to the extent the Corporation determines it is necessary or advisable for legal or administrative reasons. Such requirements may include (but are not limited to) requiring Participant to sign any agreements or undertakings that may be necessary to accomplish the foregoing.
|
7.
|
Insider Trading/Market Abuse Laws
.
Participant acknowledges that Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including the United States and Participant’s country, which may affect Participant’s ability to acquire or sell shares of Stock or rights to shares of Stock (e.g., Restricted Stock Units) under the Plan during such times as Participant is considered to have “inside information” regarding the Corporation (as defined by the
|
8.
|
Foreign Asset/Account Reporting; Exchange Controls
.
Participant’s country may have certain foreign asset and/or account reporting requirements and/or exchange controls which may affect Participant’s ability to acquire or hold shares of Stock under the Plan or cash received from participating in the Plan (including from any dividends received or sale proceeds arising from the sale of shares of Stock) in a brokerage or bank account outside Participant’s country. Participant may be required to report such accounts, assets or transactions to the tax or other authorities in his or her country. Participant also may be required to repatriate sale proceeds or other funds received as a result of Participant’s participation in the Plan to his or her country through a designated bank or broker and/or within a certain time after receipt. Participant acknowledges that it is his or her responsibility to be compliant with such regulations, and Participant should consult his or her personal legal advisor for any details.
|
9.
|
Annex to Addendum
. Notwithstanding any provision of the Agreement or Addendum to the contrary, the Restricted Stock Units shall be subject to such special terms and conditions for Participant’s country of residence (and country of employment, if different), as are set forth in the annex to this Addendum (the “
Annex
”). Further, if Participant transfers residency and/or employment to another country, the Corporation may establish alternative terms and conditions as may be necessary or advisable to accommodate Participant’s transfer. In all circumstances, the Annex shall constitute part of this Addendum.
|
1.
|
Payment of Withholding Taxes
. The following provision supplements Section 8 of the Agreement:
|
2.
|
Exclusion of Claim
. Participant acknowledges and agrees that Participant will have no entitlement to compensation or damages insofar as such entitlement arises or may arise from Participant’s ceasing to have rights under or to be entitled to the Restricted Stock Units, whether or not as a result of termination of Service (whether such termination is in breach of contract or otherwise), or from the loss or diminution in value of the Restricted Stock Units. Upon the award of the Restricted Stock Units, Participant shall be deemed irrevocably to have waived any such entitlement.
|
3.
|
Exit from the European Union
. Should the United Kingdom exit the European Union, the terms of Section 2 of the Addendum (Participants in the European Union) shall continue to apply to the Restricted Stock Units unless otherwise determined by the Corporation, in its sole discretion. Alternatively, the Corporation may establish alternative terms and conditions as may be necessary or advisable to comply with applicable law.
|
1.
|
Award
. The Corporation hereby awards to Participant [__________] Restricted Stock Units (the “
Restricted Stock Units
”). The Restricted Stock Units will be subject to the terms and conditions of the Plan and this Agreement. Each Restricted Stock Unit is a notional amount that represents one unvested share of Stock and entitles Participant, subject to the terms of this Agreement, to receive a share of Stock if and when the Restricted Stock Unit vests.
|
2.
|
No Rights as Stockholder; Dividend Equivalents
. Participant shall have no voting rights with respect to shares of Stock represented by Restricted Stock Units until the date of the issuance of the shares of Stock (as evidenced by the appropriate entry on the books of the Corporation or of a duly authorized transfer agent of the Corporation). Notwithstanding the foregoing, in the event that the Corporation declares a cash dividend on shares of Stock, on the payment date of the dividend, Participant will be credited with Dividend Equivalent Rights equal to the amount of the cash dividend per share multiplied by the number of Restricted Stock Units held by Participant on the dividend’s record date. The Dividend Equivalent Rights credited to Participant under the preceding sentence will be distributed to Participant at the same time as the underlying cash dividend is distributed to shareholders of the Corporation.
|
3.
|
Vesting; Effect of Termination of Service
.
|
4.
|
Terms and Conditions of Distribution
.
|
5.
|
Nontransferability
. Unvested Restricted Stock Units may not be sold, transferred, exchanged, pledged, assigned, garnished, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Any effort to assign or transfer the rights under this Agreement will be wholly ineffective, and will be grounds for termination by the Committee of all rights of Participant under this Agreement.
|
6.
|
Administration
. The Committee administers the Plan. Participant’s rights under this Agreement are expressly subject to the terms and conditions of the Plan and to any guidelines the Committee adopts from time to time. The interpretation and construction by the Committee of the Plan and this Agreement, and such rules and regulations as may be adopted by the Committee for purposes of administering the Plan and this Agreement, will be final and binding upon Participant.
|
7.
|
Securities Law Requirements
. If at any time the Board or Committee determines that issuing Stock pursuant to this Agreement would violate applicable securities laws, the Corporation will not be required to issue such Stock. The Board or Committee may declare any provision of this Agreement or action of its own null and void, if it determines the provision or action fails to comply with applicable securities laws. The Corporation may require Participant to make written representations it deems necessary or desirable to comply with applicable securities laws.
|
8.
|
Payment of Withholding Taxes
. Distribution to Participant of shares of Stock under this Agreement will be subject to Federal income and other tax withholding (and state and local income tax withholding, or non-U.S. tax withholding, if applicable) by the Corporation in respect of taxes on income realized by Participant. The Corporation may withhold the minimum statutorily required
|
9.
|
Restrictive Covenants
. Participant understands the global nature of the Corporation’s businesses and the effort the Corporation and the Chicago Board Options Exchange, Incorporated (together referred to in this Section as the “
CBOE
”) undertake to develop and protect their business and their competitive advantage. Accordingly, Participant agrees that the scope and duration of the restrictions described in this Agreement are reasonable and necessary to protect the legitimate business interests of the CBOE. Participant further agrees that during the period of Participant’s Service and for a period of two (2) years following Participant’s separation from Service, Participant shall not:
|
10.
|
Confidentiality
. Participant acknowledges that the Corporation or an Affiliate may disclose secret or confidential information to Participant during the period of Participant’s Service to enable Participant to perform his or her duties. Participant agrees that, subject to the following sentence, Participant shall not during his or her Service (except in connection with the proper performance of his or her duties) and thereafter, without the prior written consent of the Corporation, disclose to any person or entity any material or significant secret or confidential information concerning the business of the Corporation or an Affiliate that was obtained by Participant in the course of Participant’s Service. This paragraph shall not be applicable if and to the extent Participant is required to testify in a legislative, judicial or regulatory proceeding pursuant to an order of Congress, any state or local legislature, a judge, or an administrative law judge, or if such secret or confidential information is required to be disclosed by Participant by any law, regulation or order of any court or regulatory commission, department or agency. Participant further agrees that if Participant’s Service is terminated for any reason, Participant will not take, but will leave with the Corporation or an Affiliate, all records and papers and all matter of whatever nature that bears secret or confidential information of the Corporation or an Affiliate. For purposes of this Agreement, the term “secret or confidential information” shall include, but not be limited to, any and all records, notes, memoranda, data, writings, research, personnel information, customer information, clearing members’ information, the Corporation’s and any Affiliate’s financial information and plans, processes, methods, techniques, systems, formulas, patents, models, devices, compilations or any other information of whatever nature in the possession or control of the Corporation or an Affiliate, that has not been published or disclosed to the general public, the options industry or the commodities futures industry, provided that such term shall not include knowledge, skills, and information that is common to the trade or profession of Participant.
|
11.
|
Judicial Modification
. If the final judgment of a court of competent jurisdiction declares that any term or provision of Section 9 or 10 is invalid or unenforceable, the parties agree that (a) the court
|
12.
|
Remedies
. Participant agrees that in the event of a breach or threatened breach of any of the covenants contained in Sections 9 or 10 of this Agreement, in addition to any other penalties or restrictions that may apply under any employment agreement, state law, or otherwise, Participant shall forfeit, upon written notice to such effect from the Corporation, any and all Awards granted to him or her under the Plan and this Agreement, including vested Awards. The forfeiture provisions of this Section 12 shall continue to apply, in accordance with their terms, after the provisions of any employment or other agreement between the Corporation and Participant have lapsed. Participant consents and agrees that if Participant violates or threatens to violate any provisions of Sections 9 or 10 of this Agreement, the Corporation or its successors in interest shall be entitled, in addition to any other remedies that they may have, including money damages, to an injunction to be issued by a court of competent jurisdiction restraining Participant from committing or continuing any violation of Sections 9 or 10. In the event that Participant is found to have breached any provision set forth in Section 9 of this Agreement, the time period provided for in that provision shall be deemed tolled (
i.e.
, it will not begin to run) for as long as Participant was in violation of that provision.
|
13.
|
Representations and Warranties
. Participant represents and warrants to the Corporation that Participant has received a copy of the Plan and this Agreement, has read and understands the terms of the Plan and this Agreement, and agrees to be bound by their terms and conditions in all respects.
|
14.
|
No Limitation on the Corporation’s Rights
. The granting of Restricted Stock Units under this Agreement shall not and will not in any way affect the Corporation’s right or power to make adjustments, reclassifications or changes in its capital or business structure or to merge, consolidate, reincorporate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
|
15.
|
Plan and Agreement Not a Contract of Employment or Service
. Neither the Plan nor this Agreement is a contract of employment or Service, and no terms of Participant’s employment or Service will be affected in any way by the Plan, this Agreement or related instruments, except to the extent specifically expressed therein. Neither the Plan nor this Agreement will be construed as conferring any legal rights of Participant to continue to be employed or remain in Service, nor will it interfere with the Corporation’s or any Affiliate’s right to discharge Participant or to deal with Participant regardless of the existence of the Plan or this Agreement.
|
16.
|
Entire Agreement and Amendment
. This Agreement and the Plan constitute the entire agreement between the parties hereto with respect to the Restricted Stock Units, and all prior oral and written representations are merged in this Agreement and the Plan. Notwithstanding the preceding sentence, this Agreement shall not in any way affect the terms and provisions of the Plan. This Agreement may be amended, modified, or terminated only in accordance with the Plan. The headings in this Agreement are inserted for convenience and identification only and are not intended to describe, interpret, define or limit the scope, extent, or intent of this Agreement or any provision hereof.
|
17.
|
Notice
. Any notice or other communication required or permitted under this Agreement must be in writing and must be delivered personally, sent by certified, registered or express mail, sent by overnight courier (at the sender’s expense), or (if from the Corporation or the Corporation’s stock plan administrator) by electronic mail. Notice will be deemed given (a) when delivered personally, (b) if mailed, three days after the date of deposit in the U.S. mail, (c) if sent by overnight courier, on the regular business day following the date sent, or (d) when electronically mailed. Notice to the Corporation should be sent to CBOE Holdings, Inc., 400 South LaSalle Street, Chicago, Illinois 60605, Attention: General Counsel. Notice to Participant should be sent to the mailing address and/or electronic mailing address set forth on the Corporation’s records. Either party may change the address to which the other party must give notice under this Section 17 by giving the other party written notice of such change, in accordance with the procedures described above or otherwise established by the Corporation or its stock plan administrator.
|
18.
|
Successors and Assigns
. The terms of this Agreement will be binding upon the Corporation and its successors and assigns.
|
19.
|
Governing Law
. To the extent not preempted by Federal law, the Plan, this Agreement, and documents evidencing rights relating to the Plan or this Agreement will be construed, administered and governed in all respects under and by the laws of the State of Delaware, without giving effect to its conflict of laws principles. If any provision of this Agreement will be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof will continue to be fully effective. The jurisdiction and venue for any disputes arising under, or any action brought to enforce (or otherwise relating to), this Agreement will be exclusively in the courts in the State of Illinois, County of Cook, including the Federal Courts located therein (should Federal jurisdiction exist).
|
20.
|
Plan Document Controls
. The rights granted under this Agreement are in all respects subject to the provisions set forth in the Plan to the same extent and with the same effect as if set forth fully in this Agreement. If the terms of this Agreement conflict with the terms of the Plan document, the Plan document will control.
|
21.
|
Counterparts
. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument.
|
22.
|
Waiver; Cumulative Rights
. The failure or delay of either party to require performance by the other party of any provision of this Agreement will not affect its right to require performance of such provision unless and until such performance has been waived in writing. Each right under this Agreement is cumulative and may be exercised in part or in whole from time to time.
|
23.
|
Tax Consequences
.
Participant agrees to determine and be responsible for all tax consequences to Participant with respect to the Restricted Stock Units.
|
24.
|
Section 409A
.
The Restricted Stock Units granted hereunder are intended to comply with, or otherwise be exempt from, Section 409A, including the exceptions and exemptions for short term deferrals, stock rights, and separation pay arrangements. This Agreement and all Restricted Stock Units shall be administered, interpreted, and construed in a manner consistent with Section 409A. Should any provision of this Agreement, or any other agreement or arrangement contemplated by this Agreement, be found not to comply with, or otherwise be exempt from, the provisions of Section 409A, such provision shall be modified and given effect (retroactively if necessary), in the sole discretion of the
|
25.
|
Awards Subject to the Corporation’s Recovery of Funds Policy
. Notwithstanding anything in this Agreement to the contrary, the Restricted Stock Units covered by this Agreement shall be subject to the Corporation’s compensation recovery policy, as may be in effect from time to time, including, without limitation, the provisions of any such policy required by Section 10D of the Exchange Act and any applicable rules or regulations issued by the SEC or any national securities exchange or national securities association on which the Stock may be traded.
|
26.
|
Addendum to Agreement.
Notwithstanding any provision of this Agreement to the contrary, if Participant resides or is employed outside the U.S. or transfers residence or employment outside the U.S., the Restricted Stock Units shall be subject to such special terms and conditions as are set forth in the addendum to this agreement (the “
Addendum
”). Further, if Participant transfers residency and/or employment to another country, any special terms and conditions for such country will apply to the Restricted Stock Units to the extent the Corporation determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable in order to comply with local law or to facilitate the operation and administration of the Restricted Stock Units and the Plan (or the Corporation may establish alternative terms and conditions as may be necessary or advisable to accommodate Participant’s transfer). In all circumstances, the Addendum shall constitute part of this Agreement.
|
_________________________________
|
|
|
Participant’s Name
|
|
|
_________________________________
|
|
|
Participant’s Signature
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
Nature of Grant
. In accepting the Restricted Stock Units, Participant acknowledges that:
|
2.
|
Participants in the European Union
. If Participant resides and/or is employed in a European Union member state, the following provision shall replace Section 3(b) of the Agreement in its entirety and any other provisions regarding Retirement Vesting shall be disregarded and of no effect:
|
3.
|
Payment of Withholding Taxes
. Participant acknowledges and agrees that if Participant is subject to tax and/or social contributions in more than one jurisdiction, the Corporation or its Affiliate(s) may be required to withhold or account for taxes and/or social contributions in more than one jurisdiction, in accordance with the methods of withholding described in Section 8 of the Agreement.
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4.
|
Data Privacy
. Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Agreement and any other Restricted Stock Unit grant materials by and among, as applicable, the Employer, the Corporation, and its Affiliates for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan.
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5.
|
No Advice Regarding Grant
.
The Corporation is not providing any tax, legal or financial advice, nor is the Corporation making any recommendations regarding Participant’s participation in the Plan, or Participant’s acquisition or sale of the underlying shares of Stock. Participant should consult with his or her own personal tax, legal and financial advisors regarding Participant’s participation in the Plan before taking any action related to the Plan.
|
6.
|
Imposition of Other Requirements
.
The Corporation reserves the right to impose other requirements on Participant’s participation in the Plan, on the Restricted Stock Units and on any shares of Stock acquired under the Plan, to the extent the Corporation determines it is necessary or advisable for legal or administrative reasons. Such requirements may include (but are not limited to) requiring Participant to sign any agreements or undertakings that may be necessary to accomplish the foregoing.
|
7.
|
Insider Trading/Market Abuse Laws
.
Participant acknowledges that Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including the United States and Participant’s country, which may affect Participant’s ability to acquire or sell shares of Stock or rights to shares of Stock (e.g., Restricted Stock Units) under the Plan during such times as Participant is considered to have “inside information” regarding the Corporation (as defined by the
|
8.
|
Foreign Asset/Account Reporting; Exchange Controls
.
Participant’s country may have certain foreign asset and/or account reporting requirements and/or exchange controls which may affect Participant’s ability to acquire or hold shares of Stock under the Plan or cash received from participating in the Plan (including from any dividends received or sale proceeds arising from the sale of shares of Stock) in a brokerage or bank account outside Participant’s country. Participant may be required to report such accounts, assets or transactions to the tax or other authorities in his or her country. Participant also may be required to repatriate sale proceeds or other funds received as a result of Participant’s participation in the Plan to his or her country through a designated bank or broker and/or within a certain time after receipt. Participant acknowledges that it is his or her responsibility to be compliant with such regulations, and Participant should consult his or her personal legal advisor for any details.
|
9.
|
Annex to Addendum
. Notwithstanding any provision of the Agreement or Addendum to the contrary, the Restricted Stock Units shall be subject to such special terms and conditions for Participant’s country of residence (and country of employment, if different), as are set forth in the annex to this Addendum (the “
Annex
”). Further, if Participant transfers residency and/or employment to another country, the Corporation may establish alternative terms and conditions as may be necessary or advisable to accommodate Participant’s transfer. In all circumstances, the Annex shall constitute part of this Addendum.
|
1.
|
Payment of Withholding Taxes
. The following provision supplements Section 8 of the Agreement:
|
2.
|
Exclusion of Claim
. Participant acknowledges and agrees that Participant will have no entitlement to compensation or damages insofar as such entitlement arises or may arise from Participant’s ceasing to have rights under or to be entitled to the Restricted Stock Units, whether or not as a result of termination of Service (whether such termination is in breach of contract or otherwise), or from the loss or diminution in value of the Restricted Stock Units. Upon the award of the Restricted Stock Units, Participant shall be deemed irrevocably to have waived any such entitlement.
|
3.
|
Exit from the European Union
. Should the United Kingdom exit the European Union, the terms of Section 2 of the Addendum (Participants in the European Union) shall continue to apply to the Restricted Stock Units unless otherwise determined by the Corporation, in its sole discretion. Alternatively, the Corporation may establish alternative terms and conditions as may be necessary or advisable to comply with applicable law.
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Name of Subsidiary
|
|
Jurisdiction of Organization
|
Chicago Board Options Exchange, Incorporated
|
|
Delaware
|
CBOE, LLC
|
|
Delaware
|
C2 Options Exchange, Incorporated
|
|
Delaware
|
CBOE Futures Exchange, LLC
|
|
Delaware
|
Market Data Express, LLC
|
|
Delaware
|
Chicago Options Exchange Building Corporation
|
|
Delaware
|
CBOE Livevol, LLC
|
|
Delaware
|
|
|
|
1.
|
I have reviewed this Annual Report on Form 10-K for the year ended
December 31, 2016
of CBOE Holdings, Inc. (the "registrant");
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ EDWARD T. TILLY
|
||
Name:
|
|
Edward T. Tilly
|
Title:
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K for the year ended
December 31, 2016
of CBOE Holdings, Inc. (the "registrant");
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ ALAN J. DEAN
|
||
Name:
|
|
Alan J. Dean
|
Title:
|
|
Executive Vice President and Chief Financial Officer
|
/s/ EDWARD T. TILLY
|
Edward T. Tilly
|
February 21, 2017
|
/s/ ALAN J. DEAN
|
Alan J. Dean
|
February 21, 2017
|