CBOE Holdings, Inc. (Form: 10-Q, Received: 05/11/2017 06:07:29)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q




☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2017



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-37732

CBOE HOLDINGS, INC.

(Exact Name of Registrant as Specified in Its Charter)




Delaware		20-5446972
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)



400 South LaSalle Street Chicago, Illinois	60605
(Address of Principal Executive Offices)	(Zip Code)

(Registrant's telephone number, including area code)

(312) 786-5600

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:



Class		May 5, 2017
Common Stock, par value $0.01		112,042,728 shares

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TABLE OF CONTENTS



		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets—As of March 31, 2017 and December 31, 2016	1
	Condensed Consolidated Statements of Income—Three Months Ended March 31, 2017 and 2016	2
	Condensed Consolidated Statements of Comprehensive Income – Three Months Ended March 31, 2017 and 2016	3
	Condensed Consolidated Statement of Changes in Stockholders’ Equity—Three Months Ended March 31, 2017	4
	Condensed Consolidated Statements of Cash Flows—Three Months Ended March 31, 2017 and 2016	5
	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	48
Item 4.	Controls and Procedures	49

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	51
Item 1A.	Risk Factors	51
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	70
Item 3.	Defaults upon Senior Securities	71
Item 4.	Mine Safety Disclosures	71
Item 5.	Other Information	71
Item 6.	Exhibits	71

SIGNATURES		71
	Exhibit Index	72

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CERTAIN DEFINED TERMS

Throughout this document, unless otherwise specified or the context so requires:


•	"CBOE Holdings," "we," "us," "our" or "the Company" refers to CBOE Holdings, Inc. and its subsidiaries.


•	“Bats Global Markets” and “Bats” refer to our wholly-owned subsidiary Bats Global Markets, Inc., now known as CBOE V, LLC, and its subsidiaries.


•	“Bats Hotspot” and “Hotspot” refer to our foreign currency exchange. Hotspot operates in the United States and the United Kingdom.


•	“Bats Trading” and “Trading” refer to our broker-dealer entity, Bats Trading, Inc., operated in the United States.


•	“BTL” refers to Bats Trading Limited, the U.K. operator of our Multilateral Trading Facility ("MTF"), and our Regulated Market ("RM"), under its Recognized Investment Exchange ("RIE") status, collectively known as “Bats Europe”.


•	“BYX” refers to Bats BYX Exchange, Inc., a wholly-owned subsidiary of CBOE Holdings, Inc.


•	“BZX” refers to Bats BZX Exchange, Inc., a wholly-owned subsidiary of CBOE Holdings, Inc.


•	"C2" refers to C2 Options Exchange, Incorporated, a wholly-owned subsidiary of CBOE Holdings, Inc.


•	"CBOE" refers to Chicago Board Options Exchange, Incorporated, a wholly-owned subsidiary of CBOE Holdings, Inc.


•	"CFE" refers to CBOE Futures Exchange, LLC, a wholly-owned subsidiary of CBOE Holdings, Inc.


•	"CFTC" refers to the U.S. Commodity Futures Trading Commission.


•	“Chi-X Europe” refers to our broker-dealer operated in the United Kingdom.

“EDGA” refers to Bats EDGA Exchange, Inc., a wholly-owned subsidiary of CBOE Holdings, Inc.


•	“EDGX” refers to Bats EDGX Exchange, Inc., a wholly-owned subsidiary of CBOE Holdings, Inc.


•	"FASB" refers to the Financial Accounting Standards Board.


•	"FCA" refers to the U.K. Financial Conduct Authority.


•	"GAAP" refers to Generally Accepted Accounting Principles in the United States.


•	"Merger" refers to our acquisition of Bats Global Markets, completed on February 28, 2017.


•	"OCC" refers to The Options Clearing Corporation, which is the issuer and registered clearing agency for all U.S. exchange-listed options and is the designated clearing organization for futures traded on CFE.


•	"Our exchanges" refers to CBOE, C2, CFE, BZX, BYX, EDGX, and EDGA.


•	"SEC" refers to the U.S. Securities and Exchange Commission.


•	"SPX" refers to our S&P 500 Index exchange-traded options products.


•	"VIX" refers to the CBOE Volatility Index methodology.

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TRADEMARK AND OTHER INFORMATION

CBOE®, Chicago Board Options Exchange®, CFE®, Bats®, BZX®, BYX®, EDGX®, EDGA®, Direct Edge®, Livevol®, CBOE Volatility Index® and VIX® are registered trademarks and CBOE Futures Exchange ^SM and CBOE Vest ^SM are service marks of CBOE Holdings, Inc. and its subsidiaries. C2 ^SM and C2 Options Exchange ^SM are service marks of C2. Standard & Poor's®, S&P®, S&P 100® and S&P 500® are registered trademarks of Standard & Poor's Financial Services LLC and have been licensed for use by CBOE, C2 and CFE. Dow Jones®, Dow Jones Industrial Average®, DJIA® and Dow Jones Indexes are registered trademarks or service marks of Dow Jones Trademark Holdings, LLC, used under license. MSCI, and the MSCI index names are service marks of MSCI Inc., used under license. Russell®, Russell 1000® and Russell 2000® are registered trademarks of Frank Russell Company, used under license. FTSE® and the FTSE indexes are trademarks and service marks of FTSE International Limited, used under license. All other trademarks and service marks are the property of their respective owners.

This Quarterly Report on Form 10-Q includes market share and industry data that we obtained from industry publications and surveys, reports of governmental agencies and internal company surveys. Industry publications and surveys generally state that the information they contain has been obtained from sources believed to be reliable, but we cannot assure you that this information is accurate or complete. We have not independently verified any of the data from third-party sources nor have we ascertained the underlying economic assumptions relied upon therein. Statements as to our market position are based on the most currently available market data. While we are not aware of any misstatements regarding industry data presented herein, our estimates involve risks and uncertainties and are subject to change based on various factors. We refer you to the “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q and our other filings with the SEC.

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. You can identify these statements by forward-looking words such as "may," "might," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," and the negative of these terms and other comparable terminology. All statements that reflect our expectations, assumptions or projections about the future other than statements of historical fact are forward-looking statements, including statements in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of this report. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from that expressed or implied by the forward-looking statements. In particular, you should consider the risks and uncertainties described under “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q and our other filings with the SEC.

While we believe we have identified the risks that are material to us, these risks and uncertainties are not exhaustive. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Some factors that could cause actual results to differ include:


•	the loss of our right to exclusively list and trade certain index options and futures products;


•	economic, political and market conditions;


•	compliance with legal and regulatory obligations;


•	price competition and consolidation in our industry;


•	decreases in trading volumes, market data fees or a shift in the mix of products traded on our exchanges;


•	legislative or regulatory changes;


•	increasing competition by foreign and domestic entities;


•	our dependence on and exposure to risk from third parties;


•	our index providers' ability to maintain the quality and integrity of their indexes and to perform under our agreements;


•	our ability to operate our business without violating the intellectual property rights of others and the costs associated with protecting our intellectual property rights;


•	our ability to attract and retain skilled management and other personnel, including those experienced with post-acquisition integration;


•	our ability to accommodate trading volume and transaction traffic, including significant increases, without failure or degradation of performance of our systems;


•	our ability to protect our systems and communication networks from security risks, including cyber-attacks and unauthorized disclosure of confidential information;


•	challenges to our use of open source software code;


•	our ability to meet our compliance obligations, including managing potential conflicts between our regulatory responsibilities and our for-profit status;


•	damage to our reputation;


•	the ability of our compliance and risk management methods to effectively monitor and manage our risks;


•	our ability to manage our growth and strategic acquisitions or alliances effectively;


•	unanticipated difficulties or expenditures relating to the Merger, including, without limitation, difficulties that result in the failure to realize expected synergies, accretion, efficiencies and cost savings from the Merger within the expected time period (if at all), whether in connection with integration, migrating trading platforms, broadening distribution of product offerings or otherwise;

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•	restrictions imposed by our debt obligations;


•	our ability to maintain an investment grade credit rating;


•	potential difficulties in our migration of trading platforms and our ability to retain employees as a result of the Merger; and


•	the accuracy of our estimates and expectations.

For a detailed discussion of these and other factors that might affect our performance, see Part II, Item 1A of this Report. We do not undertake, and expressly disclaim, any duty to update any forward-looking statement whether as a result of new information, future events or otherwise, except as required by law. We caution you not to place undue reliance on the forward-looking statements, which speak only as of the date of this filing.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

CBOE Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in millions, except share and per share amounts)



	March 31, 2017			December 31, 2016
Assets	(unaudited)
Current Assets:
Cash and cash equivalents	$	153.3		$	97.3
Financial investments	41.3			—
Accounts receivables, net	233.3			76.7
Income taxes receivable	12.0			53.7
Other current assets	15.8			7.4
Total Current Assets	455.7			235.1
Investments	82.0			72.9
Land	4.9			4.9
Property and equipment, net	74.6			55.9
Goodwill	2,675.6			26.5
Intangible assets, net	1,996.0			8.7
Other assets, net	56.3			72.7
Total Assets	$	5,345.1		$	476.7
Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity
Current Liabilities:
Accounts payable and accrued liabilities	$	149.7		$	82.4
Section 31 fees payable	76.3			4.4
Deferred revenue and other current liabilities	18.0			3.1
Income tax payable	10.3			—
Current portion of contingent consideration liability	6.6			—
Total Current Liabilities	260.9			89.9
Long-term Liabilities:
Long-term debt, less current portion	1,486.7			—
Contingent consideration liability	49.1			—
Income tax liability	63.5			52.1
Deferred income taxes	720.6			—
Other non-current liabilities	6.3			4.2
Total Long-term Liabilities	2,326.2			56.3
Commitments and Contingencies
Total Liabilities	2,587.1			146.2

Redeemable Noncontrolling Interest	12.6			12.6

Stockholders’ Equity:
Preferred stock, $.01 par value: 20,000,000 shares authorized, no shares issued and outstanding at March 31, 2017 and December 31, 2016	—			—
Common stock, $.01 par value: 325,000,000 shares authorized, 123,805,644 and 112,042,728 shares issued and outstanding, respectively at March 31, 2017 and 92,950,065 and 81,285,307 shares issued and outstanding, respectively at December 31, 2016	1.2			0.9
Treasury Stock, at cost: 11,762,916 shares at March 31, 2017 and 11,664,758 shares at December 31, 2016	(540.1		)	(532.2		)
Additional paid-in capital	2,584.5			139.2
Retained earnings	697.7			710.8
Accumulated other comprehensive income (loss), net	2.1			(0.8		)
Total Stockholders’ Equity	2,745.4			317.9
Total Liabilities and Stockholders’ Equity	$	5,345.1		$	476.7

See accompanying notes to condensed consolidated financial statements.

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CBOE Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(unaudited)

(in millions, except per share data)



	Three Months Ended March 31,
	2017			2016
Revenues:
Transaction fees	$	256.4		$	126.2
Access fees	17.8			13.2
Exchange services and other fees	15.4			11.4
Market data fees	22.5			8.0
Regulatory fees	38.3			9.1
Other revenue	5.8			2.6
Total Revenues	356.2			170.5
Cost of Revenues:
Liquidity payments	105.3			6.6
Routing and clearing	6.3			1.7
Section 31 fees	30.0			—
Royalty fees	21.2			19.1
Total Cost of Revenues	162.8			27.4
Revenues less Cost of Revenues	193.4			143.1
Operating Expenses:
Compensation and benefits	47.8			27.1
Depreciation and amortization	25.1			11.9
Technology support services	7.5			5.7
Professional fees and outside services	14.4			13.6
Travel and promotional expenses	3.3			2.5
Facilities costs	2.1			1.5
Acquisition-related costs	65.2			—
Change in contingent consideration	0.2			—
Other expenses	1.7			1.3
Total Operating Expenses	167.3			63.6
Operating Income	26.1			79.5
Non-operating (Expenses) Income:
Interest (expense) income, net	(7.9		)	0.7
Other income	0.1			0.3
Income Before Income Tax Provision	18.3			80.5
Income tax provision	3.1			31.3
Net income	15.2			49.2
Net loss attributable to noncontrolling interests	0.3			0.2
Net Income Excluding Noncontrolling Interests	15.5			49.4
Change in redemption value of noncontrolling interests	(0.3		)	—
Net income allocated to participating securities	(0.1		)	(0.2		)
Net Income Allocated to Common Stockholders	$	15.1		$	49.2
Net Income Per Share Allocated to Common Stockholders:
Basic earnings per share	$	0.16		$	0.60
Diluted earnings per share	0.16			0.60

Basic weighted average shares outstanding	91.9			81.8
Diluted weighted average shares outstanding	92.0			81.8

See accompanying notes to condensed consolidated financial statements.

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CBOE Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(unaudited)

(in millions)



	Three Months Ended March 31,
	2017			2016
Net Income	$	15.2		$	49.2
Other comprehensive income
Foreign currency translation adjustments	3.0			—
Post retirement benefit obligations	—			—
Comprehensive Income	18.2			49.2
Comprehensive loss attributable to noncontrolling interests	0.3			0.2
Comprehensive Income Excluding Noncontrolling Interests	18.5			49.4
Comprehensive income allocated to participating securities	(0.1		)	(0.2		)
Comprehensive Income Allocated to Common Stockholders	18.4			49.2
Income tax benefit	(0.1		)	—
Comprehensive Income Allocated to Common Stockholders, net of tax	$	18.3		$	49.2

See accompanying notes to condensed consolidated financial statements.

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CBOE Holdings, Inc. and Subsidiaries

Condensed Consolidated Statement of Changes in Stockholders’ Equity

(unaudited)

(in millions)



	Preferred Stock		Common Stock		Treasury Stock			Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss), net			Total Stockholders’ Equity			Redeemable Noncontrolling Interests
Balance at December 31, 2016	$	—	$	0.9	$	(532.2	)	$	139.2	$	710.8		$	(0.8	)	$	317.9		$	12.6
Issuance of stock for acquisition of Bats Global Markets, Inc.	—		0.3		—			2,424.4		—			—			2,424.7			—
Repurchase of restricted stock from employees	—		—		(7.9		)	—		—			—			(7.9		)	—
Stock-based compensation	—		—		—			20.9		—			—			20.9			—
Net income excluding noncontrolling interests	—		—		—			—		15.5			—			15.5			—
Cash dividends on common stock of $0.25 per share	—		—		—			—		(28.3		)	—			(28.3		)	—
Other comprehensive income, net of tax	—		—		—			—		—			2.9			2.9			—
Net loss attributable to redeemable noncontrolling interest	—		—		—			—		—			—			—			(0.3		)
Redemption value adjustment	—		—		—			—		(0.3		)	—			(0.3		)	0.3
Balance at March 31, 2017	—		$	1.2	$	(540.1	)	$	2,584.5	$	697.7		$	2.1		$	2,745.4		$	12.6

See accompanying notes to condensed consolidated financial statements.

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CBOE Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in millions)



	Three Months Ended March 31,
	2017			2016
Cash Flows from Operating Activities:
Net income	$	15.2		$	49.2
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	25.1			11.9
Amortization of debt issuance cost	0.9			—
Change in fair value of contingent consideration	0.2			—
Realized gain on available-for-sale securities	0.1			—
Provision for deferred income taxes	2.1			(0.2		)
Stock-based compensation expense	20.9			3.4
Impairment of data processing software	14.8			—
Equity in investments	(0.3		)	(0.3		)
Excess tax benefit from stock-based compensation	1.6			—
Changes in assets and liabilities:
Accounts receivable	(33.6		)	4.0
Income taxes receivable	47.1			23.1
Prepaid and other assets	—			(2.8		)
Other current assets	(4.7		)	0.4
Accounts payable and accrued liabilities	7.2			(9.3		)
Section 31 fees payable	(71.7		)	—
Deferred revenue	11.5			10.8
Income tax liability	(9.0		)	1.2
Income tax payable	(44.1		)	6.0
Other liabilities	(1.0		)	—
Net Cash Flows (used in) provided by Operating Activities	(17.7		)	97.4
Cash Flows from Investing Activities:
Acquisitions, net of cash acquired	(1,405.4		)	(14.3		)
Purchases of available-for-sale financial investments	(20.3		)	—
Proceeds from maturities of available-for-sale financial investments	45.0			—
Investments	—			(4.7		)
Other	1.3			—
Purchases of property and equipment	(7.4		)	(8.9		)
Net Cash Flows used in Investing Activities	(1,386.8		)	(27.9		)
Cash Flows from Financing Activities:
Proceeds from long-term debt	1,644.2			—
Principal payments of long term debt	(150.0		)	—
Debt issuance costs	(0.3		)	—
Distributions paid	(28.3		)	(18.9		)
Purchase of unrestricted stock from employees	(7.9		)	(4.1		)
Excess tax benefit from stock-based compensation	—			1.1
Purchase of common stock under announced program	—			(42.4		)
Net Cash provided by (used in) Financing Activities	1,457.7			(64.3		)
Effect of Foreign Currency Exchange Rate Changes on Cash and Cash equivalents	2.8			—
Increase in Cash and Cash Equivalents	56.0			5.2
Cash and Cash Equivalents:
Beginning of Period	97.3			102.3
End of Period	$	153.3		$	107.5
Supplemental disclosure of noncash investing activities:
Accounts receivable acquired	$	117.8		$	—
Financial investments	66.0			—
Property and equipment acquired	21.8			—
Goodwill acquired	2,649.3			—
Intangible assets acquired	2,000.0			—
Other assets acquired	32.8			—
Accounts payable and accrued expenses acquired	(60.1		)	—
Section 31 fees payable acquired	(143.6		)	—
Deferred tax liability acquired	(718.5		)	—
Other liabilities assumed	(135.4		)	—
Issuance of common stock related to acquisition	(2,424.7		)	—

See accompanying notes to condensed consolidated financial statements.

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CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

1. ORGANIZATION AND BASIS OF PRESENTATION

CBOE Holdings, Inc. (CBOE Holdings or the Company) is the owner of the Chicago Board Options Exchange, the Bats exchanges, CBOE Futures Exchange (CFE) and other subsidiaries, is one of the world’s largest exchange holding companies and a leader in providing global investors cutting-edge trading and investment solutions.

The Company offers trading across a diverse range of products in multiple asset classes and geographies, including options, futures, U.S. and European equities, exchange-traded products (ETPs), and multi-asset volatility and global foreign exchange ("FX") products. CBOE Holdings’ fourteen trading venues include the largest options exchange in the U.S. and the largest stock exchange in Europe, and the Company is the second-largest stock exchange operator in the U.S. and a leading market globally for ETP trading.

Basis of Presentation

These interim unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 .

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, valuation of redeemable noncontrolling interests and reported amounts of revenues and expenses. On an ongoing basis, management evaluates its estimates based upon historical experience, observance of trends, information available from outside sources and various other assumptions that management believes to be reasonable under the circumstances. Actual results may differ from these estimates under different conditions or assumptions.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented have been included.

The results of operations for interim periods are not necessarily indicative of the results of operations for the full year.

For those consolidated subsidiaries in which the Company's ownership is less than 100% and for which the Company has control over the assets and liabilities and the management of the entity, the outside stockholders' interest are shown as non-controlling interests.

The Company made a change in the presentation of liquidity payments, or rebates paid to customers in accordance with published fee schedules, as a cost of revenue, which historically netted against transaction fees. The Company also changed the presentation of royalty fees to be a cost of revenue. Routing fees and costs were also presented in transaction fees in total revenues and routing and clearing in total cost of revenues. These fees were previously presented as a net operating expense. These changes were made to conform to current presentation and the changes have been reflected in all periods presented.

Segment information

The Company previously operated as a single reportable business segment. As a result of the Bats acquisition on February 28, 2017 (Note 3), the Company is reporting five business segments: Options, U.S. Equities, Futures, European Equities, and Global FX, which is reflective of how the Company's chief operating decision-maker reviews and operates the business (Note 15). This change has been reflected in all periods presented.

Recent Accounting Pronouncements - Adopted

In the first quarter of 2017, the Company adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). Under the standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows

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CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

arising from contracts with customers. The Company applied the five step method outlined in the ASU to all revenue streams and elected the full retrospective implementation method. The additional disclosures required by the ASU have been included in Note 2.

In the first quarter of 2017, the Company also adopted ASU 2016-09, Compensation — Stock Compensation . This standard simplifies several aspects of the accounting for stock-based payment transactions, including the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. The Company has chosen to use the actual forfeiture rate and applied the prospective transition method for excess tax benefits and employees taxes paid. As of the adoption date, the Company did not have any awards classified as a liability under the previous guidance.

In the first quarter of 2017, the Company also adopted ASU 2016-16, Accounting for Income Taxes:Intra-Entity Transfers of Assets other than Inventory . The standard requires that the income tax impact of intra-entity sales and transfers of property, except for inventory, be recognized when the transfer occurs. The Company applied the full retrospective application which did not result in any impact to the financial statements.

Recent Accounting Pronouncements - Issued, not yet Adopted

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805)-Clarifying the Definition of a Business. ASU No. 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. There are three elements of a business: inputs, processes, and outputs. While an integrated set of assets and activities (collectively, a “set”) that is a business usually has outputs, outputs are not required to be present. Additionally, all of the inputs and processes that a seller uses in operating a set are not required if market participants can acquire the set and continue to produce outputs. ASU No. 2017-01 provides a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. If, however, the screen is not met, then the amendments in this ASU (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. Finally, the amendments in this ASU narrow the definition of the term “output” so that it is consistent with the manner in which outputs are described in Topic 606 - Revenue from Contracts with Customers . For public entities, the update is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2018. Early adoption is permitted under certain circumstances. The Company is in the process of evaluating this guidance and assessing the impact the standard could have on our consolidated financial statements. The adoption of this standard will result in less real estate acquisitions qualifying as businesses and, accordingly, acquisition costs for those acquisitions that are not businesses will be capitalized rather than expected.

In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This update simplifies the manner in which an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. In computing the implied fair value of goodwill under Step 2, an entity, prior to the amendments in ASU No. 2017-04, had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities, including unrecognized assets and liabilities, in accordance with the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. However, under this ASU, an entity should (1) perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and (2) recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the understanding that the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, ASU No. 2017-04 removes the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails such qualitative test, to perform Step 2 of the goodwill impairment test. For public entities, the update is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is in the process of evaluating this guidance and assessing the impact the standard could have on our consolidated financial statements.

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CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

In February 2016, the FASB issued ASU 2016-02, Leases . This update requires a lessee to recognize on the balance sheet a liability to make lease payments and a corresponding right-of-use asset. The guidance also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. This update is effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. The Company is in the process of evaluating this guidance and assessing the impact the standard could have on our consolidated financial statements.

In September 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) — Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB Emerging Issues Task Force). ASU No. 2016-15 addresses eight specific cash flow issues in an effort to reduce diversity in practice: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon bonds; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. The ASU is effective for the Company for fiscal years beginning after December 15, 2017, and for the interim periods within that fiscal year, Early adoption is permitted, including adoption during an interim period. The Company is in the process of evaluating this guidance and assessing the impact the standard could have on our consolidated financial statements.

2. REVENUE RECOGNITION

As of January 1, 2017, the Company adopted ASU 2014-09 Revenue from Contracts with Customers - Topic 606 and all subsequent ASUs that modified ASC 606. The Company has elected to apply the standard and all related ASUs retrospectively to each prior reporting period presented. The implementation of the new standard had no material impact on the measurement or recognition of revenue of prior periods, however additional disclosures have been added in accordance with the ASU.

The main types of revenue contracts are:

•

Transaction fees - Transaction fees represent fees charged by the Company for the performance obligation of executing a trade on its markets. These fees can be variable based on trade volume tiered discounts, however as all tiered discounts are calculated monthly, the actual discount is recorded on a monthly basis. Transaction fees, as well as any tiered volume discounts, are calculated and billed monthly in accordance with the Company’s published fee schedules. Transaction fees are recognized across all segments. The Company also pays liquidity payments to customers based on its published fee schedules. The Company uses these payments to improve the liquidity on its markets and therefore recognizes those payments as a cost of revenue.


•	Access fees - Access fees represent fees assessed for the opportunity to trade, including fees for trading-related functionality across all segments. They are billed monthly in accordance with the Company’s published fee schedules and recognized on a monthly basis when the performance obligation is met and there is no remaining performance obligation after revenue is recognized.

•

Exchange services and other fees - To facilitate trading, the Company offers technology services, terminal and other equipment rights, maintenance services, trading floor space and telecommunications services. Trading floor and equipment rights are generally on a month-to-month basis. Facilities, systems services and other fees are generally monthly fee-based, although certain services are influenced by trading volume or other defined metrics, while others are based solely on demand. All fees associated with the trading floor are recognized in the Options segment.

•

Market data fees - Market data fees represent the fees received by the Company from the U.S. tape plans and fees charged to customers for proprietary market data. Fees from the U.S. tape plans are collected monthly based on published fee schedules and distributed quarterly to the U.S. exchanges based on a known formula. A contract around proprietary market data is entered into and charged on a monthly basis in accordance with the Company’s published fee schedules as the service is provided. Both types of market data are satisfied over time, and revenue is recognized on a monthly basis as the customer receives and consumes the benefit as the Company provides the data. U.S. tape plan market data is recognized in the U.S. Equities and Options segment. Proprietary market data fees are recognized across all segments.

•

Regulatory fees - Regulatory fees represent fees collected by the Company to cover the Section 31 fees charged to the exchanges by the SEC. Consistent with industry practice, the fees charged to customers are based on the fee set by the SEC per notional value of the transaction executed on the Company’s U.S. securities markets and calculated and billed monthly. These fees are recognized in the U.S. Equities and Options segments and as the exchanges are responsible for the ultimate payment to the SEC, the exchanges are considered the principals in these transactions. Regulatory fees

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Notes to Condensed Consolidated Financial Statements (unaudited)

also includes the options regulatory fee (ORF) which supports the Company’s regulatory oversight function in the Options segment and other miscellaneous regulatory fees.


•	Other revenue - Other revenue primarily includes, among other items, revenue from various licensing agreements, all fees related to the trade reporting facility operated in the European Equities segment, and revenue associated with advertisements through the Company’s website.

All revenue recognized in the income statement is considered to be revenue from contracts with customers. The following table depicts the disaggregation of revenue according to product line and segment (in millions):



											Corporate
			U.S.				European		Global		Items and
	Options		Equities		Futures		Equities		FX		Eliminations		Total
Three months ended March 31, 2017
Transaction fees	$	140.2	$	76.7	$	27.6	$	7.2	$	3.6	$	1.1	$	256.4
Access fees	12.3		4.2		0.5		0.6		0.2		—		17.8
Exchange services and other fees	12.9		2.0		—		0.4		0.1		—		15.4
Market data fees	10.4		11.1		—		0.9		0.1		—		22.5
Regulatory fees	12.7		25.6		—		—		—		—		38.3
Other revenue	4.2		0.6		0.7		0.2		—		0.1		5.8
	$	192.7	$	120.2	$	28.8	$	9.3	$	4.0	$	1.2	$	356.2

Three months ended March 31, 2016
Transaction fees	$	104.5	$	—	$	20.8	$	—	$	—	$	0.9	$	126.2
Access fees	13.0		—		0.2		—		—		—		13.2
Exchange services and other fees	11.4		—		—		—		—		—		11.4
Market data fees	8.0		—		—		—		—		—		8.0
Regulatory fees	9.1		—		—		—		—		—		9.1
Other revenue	2.6		—		—		—		—		—		2.6
	$	148.6	$	—	$	21.0	$	—	$	—	$	0.9	$	170.5
Timing of revenue recognition
Services transferred at a point in time	$	192.7	$	120.2	$	28.8	$	9.3	$	4.0	$	1.2	$	356.2
Services transferred over time	—		—		—		—		—		—		—
	$	192.7	$	120.2	$	28.8	$	9.3	$	4.0	$	1.2	$	356.2

Contract liabilities for the period ended March 31, 2017 primarily represent prepayments of transaction fees and access fees to the Company’s exchanges. The revenue recognized from contract liabilities and the remaining balance is shown below (in millions):



	January 1, 2017		Cash Additions		Revenue Recognition			March 31, 2017
Liquidity provider sliding scale (1)	$	—	$	12.0	$	(3.0	)	$	9.0
Other, net	3.1		8.4		(2.5		)	9.0
Total deferred revenue	$	3.1	$	20.4	$	(5.5	)	$	18.0

(1) Liquidity providers are eligible to participate in the sliding scale program, which involves prepayment of transaction fees, and receive reduced fees based on the achievement of certain volume thresholds within a calendar month. This amount is amortized and recorded ratably as the transactions occur, as transaction fees, over the period.

3. ACQUISITIONS

Bats Global Markets, Inc.

On February 28, 2017, pursuant to the Agreement and Plan of Merger, dated as of September 25, 2016 (the “Merger Agreement”), by and among CBOE Holdings, Inc., a Delaware corporation (“CBOE Holdings”), Bats Global Markets, Inc., a Delaware corporation (“Bats”), CBOE Corporation, a Delaware corporation and a wholly-owned subsidiary of CBOE Holdings

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CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

(“Merger Sub”), and CBOE V, LLC, a Delaware limited liability company and a wholly-owned subsidiary of CBOE Holdings (“Merger LLC”), CBOE Holdings completed the merger (the “Merger”) of Merger Sub with and into Bats and the subsequent merger (the “Subsequent Merger”) of Bats with and into Merger LLC. As a result of the Merger, Bats became a wholly-owned subsidiary of CBOE Holdings.

The acquisition-date fair value of the consideration transferred totaled $ 4.0 billion , which consisted of the following (in millions):



Cash	$	955.5
Common stock issued	2,387.3
Equity awards issued	37.4
	3,380.2
Debt extinguished	580.0
Total consideration paid	$	3,960.2

As a result of the Merger, each share of voting common stock of Bats, par value of $ 0.01 per share (“Bats Voting Common Stock”), and each share of non-voting common stock of Bats, par value of $ 0.01 per share (“Bats Non-Voting Common Stock” and, together with the Bats Voting Common Stock, “Bats Common Stock”), issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other than shares held by CBOE Holdings, Bats or any of their respective subsidiaries, shares held by any holder of Bats Common Stock who was entitled to demand and properly demanded appraisal of such shares under Delaware law and unvested restricted shares of Bats Common Stock granted under any Bats equity incentive plan (all such shares described in this parenthetical, “Excluded Shares”)) was converted into, at the election of the holder of such share, either (i) 0.3201 of a share of common stock, par value of $ 0.01 per share, of CBOE Holdings (“CBOE Holdings Common Stock”) and $ 10.00 in cash (the “Mixed Consideration”), (ii) $ 14.99 in cash and 0.2577 of a share of CBOE Holdings Common Stock (the “Cash Election Consideration”) or (iii) 0.4452 of a share of CBOE Holdings Common Stock (the “Stock Election Consideration”). Pursuant to the terms of the Merger Agreement, the Cash Election Consideration and Stock Election Consideration payable in the Merger were calculated based on the volume-weighted average price (rounded to four decimal places) of shares of CBOE Holdings Common Stock on The Nasdaq Stock Market LLC for the period of ten consecutive trading days ended on February 24, 2017, which was $ 79.9289 . The Cash Election Consideration and the Stock Election Consideration were subject to automatic adjustment, as described in the Merger Agreement and in the definitive joint proxy statement/prospectus dated December 9, 2016, filed by CBOE Holdings with the U.S. Securities and Exchange Commission (the “SEC”) on December 12, 2016, as amended and supplemented from time to time (the “Prospectus”), to ensure that the total amount of cash paid and the total number of shares of CBOE Common Stock issued in the Merger were the same as what would have been paid and issued if all holders of Bats Common Stock received the Mixed Consideration at the Effective Time.

The amounts in the table below represent the preliminary allocation of the purchase price and are subject to revision during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. Adjustments to the provisional values during the measurement period will be recorded in the reporting period in which the adjustment amounts are determined. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in millions):

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CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)



Cash and cash equivalents	$	130.1
Accounts receivable	117.8
Financial investments	66.0
Property and equipment	21.8
Other assets	32.8
Goodwill	2,649.3
Intangibles	2,000.0
Accounts payable	(33.7		)
Accrued expenses	(26.4		)
Section 31 fee payable	(143.6		)
Income tax payable	(52.8		)
Deferred tax liability	(718.5		)
Other liabilities	(82.6		)
	$	3,960.2

For tax purposes, no tax deductible goodwill was generated as a result of this acquisition. Goodwill was assigned to the Options, U.S. Equities, European Equities, and Global FX segments as further described in Note 9 and is attributable to the expansion of asset classes, broadening of geographic reach, and expected synergies of the combined workforce, products and technologies of the Company and Bats. The preliminary intangible assets were assigned to the Options, U.S. Equities, European Equities, and Global FX segments in the following manner and will be amortized over the following useful lives:



			U.S.		European
(amounts in millions)	Options		Equities		Equities		Global FX		Useful life
Trading registrations and licenses	$	95.5	$	572.7	$	171.8	$	—	indefinite
Customer relationships	37.1		222.9		160.0		140.0		20 years
Market data customer relationships	53.6		322.0		60.0		64.4		15 years
Technology	22.5		22.5		22.5		22.5		7 years
Trademarks and trade names	1.0		6.0		1.8		1.2		2 years
Goodwill	226.4		1,736.4		419.3		267.2
	$	436.1	$	2,882.5	$	835.4	$	495.3

There was no goodwill or intangible assets assigned to the Futures segment as a result of this transaction as Bats did not operate a Futures business and no synergies are attributable to this segment.

The fair value of accounts receivable acquired was $ 117.8 million . The gross amount of accounts receivable was $ 118 million of which $0.2 million was deemed uncollectable.

The Company expensed $ 65.2 million of acquisition-related costs expensed during the three months ended March 31, 2017 that included $30.2 million of compensation related costs, $ 19.3 million of professional fees, $ 14.8 million of an impairment of capitalized data processing software, and $ 0.9 million of facilities expenses. These costs are included in acquisition-related costs in the condensed consolidated statements of income.

The amounts of revenue, operating loss and net income of Bats are included in the Company’s condensed consolidated statements of income from the acquisition date to March 31, 2017 and are as follows (in millions):



	One Month Ended March 31, 2017
Revenue	$	159.8
Operating loss	(2.0		)
Net loss	(0.7		)

The financial information in the table below summarizes the combined results of operations of the Company and Bats, on a pro forma basis, as though the companies had been combined as of January 1, 2016. The pro forma financial information is

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CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the period presented. Such pro forma financial information is based on the historical financial statements of the Company and Bats. This pro forma financial information is based on estimates and assumptions that have been made solely for purposes of developing such pro forma information, including, without limitation, preliminary purchase accounting adjustments. The pro forma financial information does not reflect any synergies or operating cost reductions that may be achieved from the combined operations. The pro forma financial information combines the historical results for the Company and Bats for the three months ended March 31, 2017 and 2016 in the following table (in millions, except per share amounts):



	Three Months Ended March 31,
	2017		2016
Revenue	$	629.1	$	681.6
Operating income	106.9		107.0
Net income allocated to common stockholders	73.0		58.1
Earnings per share:
Basic	$	0.65	$	0.52
Diluted	$	0.65	$	0.52

The supplemental 2017 and 2016 pro forma amounts have been calculated after applying the Company's accounting policies and adjusting the results to reflect the additional depreciation and amortization that would have been charged assuming the adjusted fair values of property and equipment and acquired intangible assets had been applied on January 1, 2017 and on January 1, 2016. The supplemental 2017 pro forma financial information includes pro forma adjustments of $ 66.8 million for acquisition-related costs, such as fees to investment bankers, attorneys, accountants and other professional advisors, as well as severance to employees.

4. SEVERANCE

Subsequent to the Bats acquisition, the Company determined that certain employees' positions were redundant. As such, the Company communicated employee termination benefits to theses employees.

The following is a summary of the employee termination benefits recognized within acquisition costs in the Corporate Items and Eliminations unit in the condensed consolidated statements of income (in millions):



	Employee Termination Benefits
Balance at December 31, 2016	$	0.4
Termination benefits accrued	20.5
Termination payments made	(9.2		)
Balance at March 31, 2017	$	11.7

As a result of ongoing integration activities, we are not in a position to provide the expected activity and completion dates.

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Notes to Condensed Consolidated Financial Statements (unaudited)

5. INVESTMENTS

As of March 31, 2017 and December 31, 2016 , the Company's investments were comprised of the following (in millions):



	March 31, 2017		December 31, 2016
Equity Method
Investment in Signal Trading Systems, LLC	$	13.2	$	12.4
Investment in EuroCCP	8.3		—
Total equity method investments	21.5		12.4

Cost Method
Investment in OCC	30.3		30.3
Other cost method investments	30.2		30.2
Total cost method investments	60.5		60.5

Total Investments	$	82.0	$	72.9

Equity Method

Equity method investments include investments in Signal Trading Systems, LLC ("Signal") and EuroCCP, a Dutch domiciled clearing house. EuroCCP is one of three interoperable central counterparties, or CCPs, used to clear trades conducted on Bats Europe's markets. BTL owns 20% of EuroCCP and can exercise significant influence over the entity as an equal shareholder with four other investors.

In the three months ended March 31, 2017 , the Company recorded contributions to Signal of $0.5 million and equity earnings in Signal of $0.3 million .

Cost method

The carrying amount of cost method investments totaled $60.5 million for March 31, 2017 and December 31, 2016 , and is included in investments in the condensed consolidated balance sheet. The company accounts for these investments using the cost-method of accounting primarily as a result of the Company's inability to exercise significant influence as the Company is a smaller shareholder of these investments. As of March 31, 2017 , cost method investments primarily reflect a 20% investment in OCC and minority investments in American Financial Exchange, CurveGlobal and Eris Exchange Holdings, LLC.

In December 2014, OCC announced a newly-formed capital plan. The OCC capital plan was designed to strengthen OCC's capital base and facilitate its compliance with proposed SEC regulations for Systemically Important Financial Market Utilities ("SIFMUs") as well as international standards applicable to financial market infrastructures. On February 26, 2015, the SEC issued a notice of no objection to OCC's advance notice filing regarding the capital plan, and OCC and OCC’s existing exchange stockholders, which include CBOE, subsequently executed agreements effecting the capital plan. Under the plan, each of OCC's existing exchange stockholders agreed to contribute its pro-rata share, based on ownership percentage, of $150 million in equity capital, which would increase OCC's shareholders' equity, and to provide its pro rata share in replenishment capital, up to a maximum of $40 million per exchange stockholder, if certain capital thresholds are breached. OCC also adopted policies under the plan with respect to fees, customer refunds, and stockholder dividends, which envision an annual dividend payment to the exchange stockholders equal to the portion of OCC’s after-tax income that exceeds OCC’s capital requirements after payment of refunds to OCC’s clearing members (with such customer refunds generally to constitute 50% of the portion of OCC’s pre-tax income that exceeds OCC’s capital requirements). On March 3, 2015, in accordance with the plan, CBOE contributed $30 million to OCC. On March 6, 2015, OCC informed CBOE that the SEC, acting though delegated authority, had approved OCC's proposed rule filing for the capital plan. The SEC approval order was stayed on March 13, 2015 automatically as a result of the initiation of petitions to review the order. On September 10, 2015, the SEC issued orders that discontinued the automatic stay of the approval order and granted the petitions for the SEC to review the approval order. On September 15, 2015, the petitioners filed motions to reinstitute the automatic stay. On February 11, 2016, based on a de novo review of the entire record, the SEC approved the proposed rule change implementing OCC's capital plan and dismissed the petitions for

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CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

review and the petitioners' motions. Certain petitioners subsequently appealed the SEC approval order for the OCC capital plan to the U.S. Court of Appeals for the D.C. Circuit and moved to stay the SEC approval order. On February 23, 2016, the Court denied the petitioners’ motion to stay. The appeal of the SEC approval order remains pending. CBOE's contribution has been recorded under investments in the condensed consolidated balance sheets as of March 31, 2017 .

6. FINANCIAL INVESTMENTS

The Company’s financial investments with original or acquired maturities longer than three months, but that mature in less than one year from the condensed consolidated balance sheet date are classified as current assets and are summarized as follows (in millions):



	March 31, 2017
	Cost basis		Unrealized gains		Unrealized losses			Fair value
Available-for-sale:
U.S. Treasury securities	$	41.0	$	—	$	(0.2	)	$	40.8
Trading securities:
U.S. Treasury securities	0.5		—		—			0.5
Money market funds	46.5		—		—			46.5
Total financial investments	$	88.0	$	—	$	(0.2	)	$	87.8



	December 31, 2016
	Cost basis		Unrealized gains		Unrealized losses		Fair value
Money market funds	$	67.5	—		—		$	67.5
Total financial investments	$	67.5	$	—	$	—	$	67.5

7. PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following as of March 31, 2017 and December 31, 2016 (in millions):



	March 31,			December 31,
	2017			2016
Construction in progress	$	2.9		$	0.2
Building	77.3			77.0
Furniture and equipment	161.0			138.8
Total property and equipment	241.2			216.0
Less accumulated depreciation	(166.6		)	(160.1		)
Total property and equipment, net	$	74.6		$	55.9

Depreciation expense was $6.4 million and $11.5 million for the three months ended March 31, 2017 and 2016 respectively.

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Notes to Condensed Consolidated Financial Statements (unaudited)

8. OTHER ASSETS, NET

Other assets, net consisted of the following as of March 31, 2017 and December 31, 2016 (in millions):



	March 31,			December 31,
	2017			2016
Software development work in progress	$	8.2		$	12.3
Data processing software	214.8			222.6
Less accumulated depreciation	(175.8		)	(172.0		)
Data processing software, net	47.2			62.9

Other assets (1)	9.1			9.8
Data processing software and other assets, net	$	56.3		$	72.7

(1) At December 31, 2016, other assets included $ 6.2 million of deferred financing costs and $3.5 million of deferred tax assets. The deferred financing costs were subsequently reclassified and recorded as a reduction of long-term debt. As a result of the recording deferred tax liabilities related to the acquisition of Bats, as of March 31, 2017, the Company no longer has a deferred tax asset balance.

9. GOODWILL AND INTANGIBLE ASSETS, NET

The following table presents the details of goodwill by segment (in millions):



				U.S.		European		Global		Corporate Items
	Options			Equities		Equities		FX		and Eliminations		Total
Balance as of December 31, 2016	$	7.7		$	—	$	—	$	—	$	18.8	$	26.5
Additions	226.4			1,736.4		419.3		267.2		—		2,649.3
Dispositions	(1.4		)	—		—		—		—		(1.4		)
Changes in foreign currency exchange rates	—			—		1.2		—		—		1.2
Balance as of March 31, 2017	$	232.7		$	1,736.4	$	420.5	$	267.2	$	18.8	$	2,675.6

Goodwill has been allocated to specific reporting units for purposes of impairment testing - Options, U.S. Equities, European Equities and Global FX. Goodwill impairment testing is performed annually in the fiscal fourth quarter or more frequently if conditions exist that indicate that the asset may be impaired. The allocation of the new goodwill did not impact the existing goodwill assignment to reporting units and there are no aggregate impairments of goodwill.

The following table presents the details of the intangible assets (in millions):



				U.S.			European			Global			Corporate Items
	Options			Equities			Equities			FX			and Eliminations			Total
Balance as of December 31, 2016	$	2.0		$	—		$	—		$	—		$	6.7		$	8.7
Additions	209.7			1,146.1			416.1			228.1			—			2,000.0
Dispositions	(0.2		)	—			—			—			—			(0.2		)
Amortization	(1.6		)	(7.4		)	(2.3		)	(2.8		)	(0.3		)	(14.4		)
Changes in foreign currency exchange rates	—			—			1.9			—			—			1.9
Balance as of March 31, 2017	$	209.9		$	1,138.7		$	415.7		$	225.3		$	6.4		$	1,996.0

For the three months ended March 31, 2017 and March 31, 2016 amortization expense was $14.4 million and $0.4 million , respectively. The estimated future amortization expense is $127.4 million for the remainder of 2017, $158.5 million for 2018, $137.5 million for 2019, $121.1 million for 2020, $105.8 million for 2021 and $93.5 million for 2022.

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Notes to Condensed Consolidated Financial Statements (unaudited)

The following tables present the categories of intangible assets as of March 31, 2017 and December 31, 2016 (in millions):



																Weighted
	March 31, 2017															Average
				U.S.			European						Corporate Items			Amortization
	Options			Equities			Equities			Global FX			and Eliminations			Period (in years)
Trading registrations and licenses	$	95.5		$	572.7		$	172.6		$	—		$	—		Indefinite
Customer relationships	37.9			222.9			160.7			140.0			3.0			20
Market data customer relationships	53.6			322.0			60.3			64.4			—			15
Technology	23.4			22.5			22.6			22.5			4.0			7
Trademarks and tradenames	1.4			6.0			1.8			1.2			1.0			2
Other	0.2			—			—			—			—
Accumulated amortization	(2.1		)	(7.4		)	(2.3		)	(2.8		)	(1.6		)
	$	209.9		$	1,138.7		$	415.7		$	225.3		$	6.4



													Weighted
	December 31, 2016												Average
				U.S.		European				Corporate			Amortization
	Options			Equities		Equities		Global FX		and Other			Period (in years)
Trading registrations and licenses	$	—		$	—	$	—	$	—	$	—		—
Customer relationships	0.9			—		—		—		3.0			9
Market data customer relationships	—			—		—		—		—			—
Technology	1.1			—		—		—		4.0			4
Trademarks and tradenames	0.4			—		—		—		1.0			6
Other	0.2			—		—		—		—			2
Accumulated amortization	(0.6		)	—		—		—		(1.3		)
	$	2.0		$	—	$	—	$	—	$	6.7

10. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consisted of the following as of March 31, 2017 and December 31, 2016 (in millions):



	March 31, 2017		December 31, 2016
	March 31, 2017		December 31, 2016
Compensation and benefit related liabilities	$	7.7	$	25.5
Termination benefits	11.7		—
Royalties	18.7		17.8
Accrued liabilities	51.2		25.4
Marketing fee payable	9.0		7.2
Accounts payable	51.4		6.5
	$	149.7	$	82.4

Table of Contents

CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

11. DEBT

The Company's long-term debt consisted of the following at March 31, 2017 and December 31, 2016 (in millions):



	March 31,		December 31,
	2017		2016
Term Loan Agreement	$	843.3	$	—
3.650% Senior Notes	643.4		—
Revolving credit agreement	—		—
Total long-term debt	$	1,486.7	$	—

In connection with the Merger, on December 15, 2016, the Company entered into a $ 1.0 billion senior unsecured delayed draw term loan facility and on January 12, 2017, the Company issued $ 650 million aggregate principal amount of our 3.650% Senior Notes due 2027. The proceeds from this delayed draw term loan facility and issuance of our senior notes, in addition to using cash on hand at CBOE Holdings and Bats, were used to finance a portion of the cash component of the Merger consideration, to refinance existing indebtedness of Bats and its subsidiaries and to pay related fees and expenses. In addition, on December 15, 2016, the Company entered into a $ 150 million revolving credit facility to be used for working capital and other general corporate purposes.

Term Loan Agreement

On December 15, 2016, the Company, as borrower, entered into a Term Loan Credit Agreement (the “Term Loan Agreement”) with Bank of America, N.A., as administrative agent, certain lenders named therein (the “Term Lenders”), 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. The Term Loan Agreement provided for a senior unsecured delayed draw term loan facility (the “Term Loan Facility”) in an aggregate principal amount of $1.0 billion .

Loans under the Term Loan Agreement bears interest, at our option, at either (i) the London Interbank Offered Rate (“LIBOR”) periodically fixed for an interest period (as selected by us) of one, two, three or six months plus a margin (based on our public debt ratings) ranging from 1.00 percent per annum to 1.75 percent per annum or (ii) a daily floating rate based on the agent’s prime rate (subject to certain minimums based upon the federal funds effective rate or LIBOR) plus a margin (based on our public debt ratings) ranging from zero percent per annum to 0.75 percent per annum. The Company was required to pay a ticking fee to the agent for the account of the Term Lenders which initially accrued at a rate (based on our public debt ratings) ranging from 0.10 percent per annum to 0.30 percent per annum multiplied by the undrawn aggregate commitments of the Term Lenders in respect of the Term Loan Facility, accruing during the period commencing on December 15, 2016 and ending on the earlier of the date on which the loans are drawn.

The Term Loan Agreement contains customary representations, warranties and affirmative and negative covenants for facilities of its type, including financial covenants, events of default and indemnification provisions in favor of the Term Lenders. The negative covenants include restrictions regarding the incurrence of liens, the incurrence of indebtedness by our subsidiaries and fundamental changes, subject to certain exceptions in each case. The financial covenants require us to meet a quarterly financial test with respect to a minimum consolidated interest coverage ratio of not less than 4.00 to 1.00 and a maximum consolidated leverage ratio of not greater than 3.50 to 1.00. At March 31, 2017 , the Company was in compliance with these covenants.

On February 28, 2017, CBOE Holdings made a draw under the Term Loan Agreement in the amount of $1.0 billion . CBOE Holdings used the proceeds to finance a portion of the cash component of the aggregate consideration for the Merger, repaid certain existing indebtedness of Bats, paid fees and expenses incurred in connection with the transactions contemplated by the Merger Agreement, funded working capital needs, and for other general corporate purposes.

3.650% Senior Notes due 2027

On January 12, 2017, the Company entered into an indenture (the “Indenture”), by and between the Company and Wells Fargo Bank, National Association, as trustee (the “Trustee”), in connection with the issuance of $650 million aggregate principal amount of the Company’s 3.650% Senior Notes due 2027 (the “Notes”). The form and terms of the Notes were established pursuant to an Officer’s Certificate, dated as of January 12, 2017 (the “Officer’s Certificate”), supplementing the Indenture.

Table of Contents

CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The Company used a portion of the net proceeds from the Notes to fund, in part, the Merger, including the payment of related fees and expenses and the repayment of Bats’ existing indebtedness, and the remainder for general corporate purposes. The Notes mature on January 12, 2027 and bear interest at the rate of 3.650% per annum, payable semi-annually in arrears on January 12 and July 12 of each year, commencing July 12, 2017. The Notes are unsecured obligations of the Company and rank equally with all of the Company’s other existing and future unsecured, senior indebtedness, but are effectively junior to the Company’s secured indebtedness, to the extent of the value of the assets securing such indebtedness, and will not be the obligations of any of the Company’s subsidiaries.

The indenture governing the Notes contains customary restrictions, including a limitation that restricts our ability and the ability of certain of our subsidiaries to create or incur secured debt. Such indenture also limits certain sale and leaseback transactions and contains customary events of default. At March 31, 2017 , the Company was in compliance with these covenants.

The Company has the option to redeem some or all of the Notes, at any time in whole or from time to time in part, at the redemption prices set forth in the Officer’s Certificate. The Company may also be required to offer to repurchase the Notes upon the occurrence of a Change of Control Triggering Event (as such term is defined in the Officer’s Certificate) at a repurchase price equal to 101% of the aggregate principal amount of Notes to be repurchased.

Revolving Credit Agreement

On December 15, 2016, the Company, as borrower, entered into a Credit Agreement (the “Revolving Credit Agreement”) with Bank of America, N.A., as administrative agent and as swing line lender, certain lenders named therein (the “Revolving Lenders”), 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.

The Revolving Credit Agreement provides for a senior unsecured $150 million five -year revolving credit facility (the “Revolving Credit Facility”) that includes a $25 million swing line sub-facility. The Company may also, subject to the agreement of the applicable lenders, increase the commitments under the Revolving Credit Facility by up to $100 million , for a total of $250 million . Subject to specified conditions, the Company may designate one or more of its subsidiaries as additional borrowers under the Revolving Credit Agreement provided that it guarantees all borrowings and other obligations of any such subsidiaries. As of March 31, 2017 , no subsidiaries were designated as additional borrowers.

Funds borrowed under the Revolving Credit Agreement may be used to fund working capital and for other general corporate purposes. As of March 31, 2017, no borrowings were outstanding under the Revolving Credit Agreement. Accordingly, at March 31, 2017 , $150 million of borrowing capacity was available for the purposes permitted by the Revolving Credit Agreement.

Loans under the Revolving Credit Agreement will bear interest, at our option, at either (i) LIBOR periodically fixed for an interest period (as selected by us) of one, two, three or six months plus a margin (based on our public debt ratings) ranging from 1.00 percent per annum to 1.75 percent per annum or (ii) a daily floating rate based on our prime rate (subject to certain minimums based upon the federal funds effective rate or LIBOR) plus a margin (based on our public debt ratings) ranging from zero percent per annum to 0.75 percent per annum.

Subject to certain conditions stated in the Revolving Credit Agreement, the Company may borrow, prepay and reborrow amounts under the Revolving Credit Facility at any time during the term of the Revolving Credit Agreement. The Revolving Credit Agreement will terminate and all amounts owing thereunder will be due and payable on December 15, 2021, unless the commitments are terminated earlier, either at our request or, if an event of default occurs, by the Revolving Lenders (or automatically in the case of certain bankruptcy-related events). The Revolving Credit Agreement contains customary representations, warranties and affirmative and negative covenants for facilities of its type, including financial covenants, events of default and indemnification provisions in favor of the Revolving Lenders. The negative covenants include restrictions regarding the incurrence of liens, the incurrence of indebtedness by our subsidiaries and fundamental changes, subject to certain exceptions in each case. The financial covenants require us to meet a quarterly financial test with respect to a minimum consolidated interest coverage ratio of not less than 4.00 to 1.00 and a maximum consolidated leverage ratio of not greater than 3.50 to 1.00. At March 31, 2017 , the Company was in compliance with these covenants.

Table of Contents

CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Bridge Facility

In connection with entering into the Merger Agreement, the Company entered into a commitment letter with Bank of America, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any of its designated affiliates) (Bank of America, N.A., and other such financial institutions that accede as lender to such debt commitment letter in accordance with its terms are referred to herein as the “Lenders”), which provides that, subject to the satisfaction and waiver of certain conditions which are usual and customary for financing of this type, the Lenders are committed to provide debt financing for the purposes of funding (i) the cash consideration to be paid in the transactions contemplated by the Merger Agreement, (ii) the refinancing of certain existing indebtedness of Bats and its subsidiaries and (iii) related fees and expenses, which debt financing consists of a senior unsecured 364 -day bridge loan facility in an aggregate principal amount of up to $1.65 billion to the extent the Company fails to generate gross cash proceeds in an aggregate principal amount of up to $1.65 billion from permanent financing including in the form of a senior unsecured term loan facility and the issuance of senior unsecured notes on or prior to the consummation of the transaction contemplated by the Merger Agreement. The Company paid commitment and structuring fees of $6.0 million . Through March 31, 2017, the Company has amortized $6.0 million of these fees as a result of the Company entering into more permanent debt arrangements. The Company entered into a term loan agreement and completed a notes offering, as described below, securing $1.65 billion to finance the cash portion of its acquisition of Bats as well as the repayment of Bats' existing indebtedness. As a result of securing the financing discussed above the bridge facility was terminated.

Loan payments and Contractual Interest

The future expected loan repayments related to the Term Loan for the three months ended March 31, 2017 is as follows (in millions):



2017	$	—
2018	—
2019	—
2020	100.0
2021	750.0
Thereafter	650.0
Principal amounts repayable	1,500
Debt issuance cost	(7.6		)
Unamortized discount on Notes	(5.7		)
Total debt outstanding	$	1,486.7

Interest expense recognized on the Term Loan and the Notes is included in interest expense, net in the condensed consolidated statements of income, for the three months ended March 31, 2017 and 2016 is as follows (in millions):



	Three Months Ended March 31,
	2017			2016
Components of interest expense:
Contractual interest	$	7.6		$	—
Amortization of debt discount	—			—
Amortization of debt issuance cost	0.9			—
Interest expense	$	8.5		$	—
Interest income	(0.6		)	(0.7		)
Interest expense, net	$	7.9		$	(0.7	)

Table of Contents

CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

12. ACCUMULATED OTHER COMPREHENSIVE INCOME, NET

The following represents the changes in accumulated other comprehensive income by component, net of tax (in millions):




	Accumulated
	Other Comprehensive
	Income
Balance at December 31, 2016	$	(0.8	)
Other comprehensive income, net of tax	2.9
Balance at March 31, 2017	$	2.1

13. FAIR VALUE MEASURMENTS

Fair value is the price that would be received upon the sale of an asset or paid upon the transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including the Company’s own credit risk.

The Company applied Financial Accounting Standards Board ("FASB") ASC 820, Fair Value Measurement and Disclosure , which provides guidance for using fair value to measure assets and liabilities by defining fair value and establishing the framework for measuring fair value. ASC 820 applies to financial and nonfinancial instruments that are measured and reported on a fair value basis. The three-level hierarchy of fair value measurements is based on whether the inputs to those measurements are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The fair-value hierarchy requires the use of observable market data when available and consists of the following levels:


•	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.

The Company has included a tabular disclosure for financial assets and liabilities that are measured at fair value on a recurring basis in the condensed consolidated balance sheet as of March 31, 2017 and December 31, 2016 .

Instruments Measured at Fair Value on a Recurring Basis

The following tables presents the Company’s fair value hierarchy for those assets measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016 (in millions):

Table of Contents

CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)



	March 31, 2017
	Total		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities:
U.S. Treasury securities	$	40.8	$	40.8	$	—	$	—
Trading securities:
U.S. Treasury securities	0.5		0.5		—		—
Money market funds	46.5		46.5		—		—
Total assets	$	87.8	$	87.8	$	—	$	—
Liabilities:
Contingent consideration liability	$	55.7	$	—	$	—	$	55.7
Total liabilities	$	55.7	$	—	$	—	$	55.7



	December 31, 2016
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds	67.5		67.5		—		—
Total assets	$	67.5	$	67.5	$	—	$	—

The following is a description of the Company’s valuation methodologies used for instruments measured at fair value on a recurring basis:

Available-for-sale and trading securities

Financial investments classified as trading and available‑for‑sale consist of highly liquid U.S. Treasury securities. These securities are valued by obtaining feeds from a number of live data sources, including active market makers and inter‑dealer brokers and therefore categorized as Level 1.

Contingent consideration liability

In connection with the acquisition of Bats, the Company acquired a contingent consideration arrangement with the former owners of Hotspot. The fair value of this liability at March 31, 2017 was $55.7 million . That value is based on estimates of discounted future cash payments, a significant unobservable input, and is considered a Level 3 measurement.

Table of Contents

CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Fair Value of Financial Instruments

The following table presents the Company’s fair value hierarchy for those financial instruments held by the Company as of March 31, 2017 and December 31, 2016 (in millions):



	March 31, 2017
	Total		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	153.3	$	153.3	$	—	$	—
Trading investments	0.5		0.5		—		—
Available-for-sale investments	40.8		40.8		—		—
Accounts receivable	233.3		233.3		—		—
Income tax receivable	12.0		12.0		—		—
Total assets	$	439.9	$	439.9	$	—	$	—
Liabilities:
Accounts payable and accrued liabilities	$	51.4	$	—	$	51.4	$	—
Section 31 fees payable	76.3		—		76.3		—
Contingent consideration liability	55.7		—		—		55.7
Long-term debt	1,486.7		—		1,486.7		—
Total liabilities	$	1,670.1	$	—	$	1,614.4	$	55.7



	December 31, 2016
	Total		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	97.3	$	97.3	$	—	$	—
Accounts receivable	76.7		76.7		—		—
Income tax receivable	53.7		53.7		—		—
Total assets	$	227.7	$	227.7	$	—	$	—
Liabilities:
Accounts payable	$	6.5	$	—	$	6.5	$	—
Total liabilities	$	6.5	$	—	$	6.5	$	—

The carrying amounts of cash and cash equivalents, accounts receivable, income tax receivable, accounts payable and Section 31 fees payable approximate fair value due to their liquid or short-term nature.

Long-term debt

The carrying amount of long-term debt approximates its fair value based on quoted LIBOR at March 31, 2017 and is considered a Level 2 measurement.

Information on Level 3 Financial Liabilities

The following table sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities during the three months ended March 31, 2017 .



	Level 3 Financial Liabilities for the Three Months Ended March 31, 2017
	Balance at Beginning of Period		Acquired During Period		Settlements		Balances at end of period


Liabilities
Contingent consideration liability	$	—	$	55.7	$	—	$	55.7
Total Liabilities	$	—	$	55.7	$	—	$	55.7

Table of Contents

CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

With the acquisition of Bats, the Company purchased a contingent consideration agreement with the former owners of Hotspot. The fair value of this liability at March 31, 2017 is $55.7 million . This value is based on estimates of discounted future cash payments under the contingent consideration agreement, a significant unobservable input, and is considered a Level 3 investment.

Allocation of goodwill and intangibles is considered Level 3 because of significant unobservable inputs.

14. REDEEMABLE NONCONTROLLING INTEREST

Redeemable noncontrolling interests are reported on the consolidated balance sheets in mezzanine equity in "Redeemable Noncontrolling Interests." The Company recognizes changes to the redemption value of redeemable noncontrolling interests as they occur and adjust the carrying value to equal the redemption value at the end of each reporting period. The resulting increases or decreases in the estimated redemption amount are affected by corresponding charges or credits against retained earnings, or in the absence of retained earnings, additional paid in capital. The redemption amounts have been estimated based on the fair value of the majority-owned subsidiary, determined based on a weighting of the discounted cash flow and other economic factors.

For the three months ended March 31, 2017 , the following reflects changes in our redeemable noncontrolling interests (in millions):



	Redeemable Noncontrolling Interest
Balance as at December 31, 2016	$	12.6
Net income attributable to redeemable noncontrolling interest	(0.3		)
Redemption value adjustment	0.3
Balance as at March 31, 2017	$	12.6

15. SEGMENT REPORTING

The Company previously operated as a single reportable business segment as of December 31, 2016 . As a result of the Merger, as of March 31, 2017 , the Company is reporting five segments: Options, U.S. Equities, Futures, European Equities, and Global FX, which is reflective of how the Company's chief operating decision-maker reviews and operates the business (Note 1). This change has been reflected in all periods presented. Segment performance is primarily based on operating income (loss). The Company's chief decision maker does not review total assets or inter-segment revenues by segment, therefore, such information is not presented. The Company has aggregated all of its corporate costs, acquisition-related costs, as well as other business ventures, within the Corporate Items and Eliminations unit based on the decision that those activities should not be used to evaluate the segment's operating performance; however, operating expenses that relate to activities of a specific segment have been allocated to that segment.

The Options segment includes our options exchange business, which lists for trading options on listed market indexes (index options), mostly on an exclusive basis, as well as on non-exclusive "multiply-listed" options, such as options on the stocks of individual corporations (equity options) and options on other exchange-traded products (ETP options), such as exchange-traded funds (ETF options) and exchange-traded notes (ETN options) that occur on CBOE, C2, BZX and EDGX. It also includes the listed equity options routed transaction services that occur on Trading.

The Futures segment includes the business of our futures exchange, CFE, which includes offering for trading futures on the VIX Index and other futures products.

The U.S. Equities segment includes listed cash equities and ETP transaction services that occur on BZX, BYX, EDGX and EDGA. It also includes market data fees generated from the U.S. tape plans as well as fees generated from the sale of proprietary market data of these exchanges. It also includes the listed cash equities and ETPs routed transaction services. In addition, it includes the listings business where ETPs and the Company are listed on BZX and includes the recently acquired ETF.com.

Table of Contents

CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The European Equities segment includes the pan‑European listed cash equities transaction services, ETPs, exchange‑traded commodities, and international depository receipts that occur on the RIE, operated by BTL. It also includes the listed cash equities and ETPs routed transaction services that occur on Chi-X Europe, as well as the listings business where ETPs can be listed on BTL.

The Global FX segment includes institutional FX services that occur on the Hotspot Platform.

Summarized financial data of reportable segments was as follows (in millions):



											Corporate
			U.S.				European				items and
	Options		Equities		Futures		Equities		Global FX		eliminations			Total
Three months ended March 31, 2017
Revenues	$	192.7	$	120.2	$	29.9	$	9.3	4.0		$	0.1		$	356.2
Operating income (loss)	65.0		12.2		25.9		1.6		(1.2	)	(77.4		)	26.1
Three months ended March 31, 2016
Revenues	$	148.6	$	—	$	21.9	$	—	—		$	—		$	170.5
Operating income (loss)	65.0		—		17.5		—		—		(3.0		)	79.5

16. EMPLOYEE BENEFITS

Legacy CBOE and new employees are eligible to participate in the Chicago Board Options Exchange SMART Plan (“SMART Plan”). The SMART Plan is a defined contribution plan, which is qualified under Internal Revenue Code Section 401(k). In addition, eligible employees may participate in the Supplemental Employee Retirement Plan, Executive Retirement Plan and Deferred Compensation Plan. Each plan is a defined contribution plan that is non-qualified under Internal Revenue Code. The Company contributed $2.6 million and $1.3 million to the defined contribution plans for the three months ended March 31, 2017 and 2016 , respectively. For the three months ended March 31, 2017, $ 1.2 million of this expense was related to the Bats Acquisition and is included in acquisition-related costs in the condensed consolidated statements of income. The remaining expense is included in compensation and benefits in the condensed consolidated statements of income.

Upon completion of the Merger, the Company assumed the BTL stakeholder contribution plan and the Bats' defined contribution plan that offers a 401(k) retirement plan eligible to all legacy Bats U.S. employees. Under the plan, the Company matches participating employee contributions dollar for dollar of up to five percent of salary. The Company’s contribution amounted to $0.2 million for the one month ended March 31, 2017 . This expense is included in compensation and benefits in the condensed consolidated statements of income.

BTL operates a stakeholder contribution plan and contributes to employee‑selected stakeholder contribution plans. The Company matches participating employee contributions of up to five percent of salary. All employees of BTL are eligible to participate. The Company’s contribution amounted to $0.1 million for the three months ended March 31, 2017 . This expense is included in compensation and benefits in the condensed consolidated statements of income.

17. REGULATORY CAPITAL

As a broker‑dealer registered with the SEC, Bats Trading, Inc. is subject to the SEC’s Uniform Net Capital rule (Rule 15c3‑1), which requires the maintenance of minimum net capital, as defined. The SEC’s requirement also provides that equity capital may not be withdrawn or a cash dividend paid if certain minimum net capital requirements are not met. Trading computes the net capital requirements under the basic method provided for in Rule 15c3‑1.

As of March 31, 2017 , Trading is required to maintain net capital equal to the greater of 6.67% of aggregate indebtedness items, as defined, or $0.1 million . At March 31, 2017, Trading had net capital of $8.7 million , which was $8.3 million in excess of its required net capital of $0.4 million .

As entities regulated by the FCA, BTL is subject to the Financial Resource Requirement ("FRR") and Chi-X Europe is subject to the Capital Resources Requirement ("CRR"). As a RIE, BTL computes its FRR in accordance with its Financial Risk Assessment, as agreed by the FCA. This FRR was $16.3 million at March 31, 2017. At March 31, 2017 BTL had capital in excess of its required FRR of $15.6 million .

Table of Contents

CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

As a Banks, Investment firms, PRUdential (BIPRU) 50k firm as defined by the Markets in Financial Instruments Directive of the FCA, Chi‑X Europe computes its CRR as the greater of the base requirement of $0.1 million at March 31, 2017 , or the summation of the credit risk, market risk and fixed overheads requirements, as defined. At March 31, 2017, Chi‑X Europe had capital in excess of its required CRR of $0.4 million .

As a swap execution facility regulated by the CFTC, Bats Hotspot SEF, LLC is required to meet two capital adequacy tests: (i) its financial resources must be equal to at least twelve months of its projected operating costs and (ii) its unencumbered, liquid financial assets must be equal to at least six months of its projected operating costs. As of March 31, 2017, Bats Hotspot SEF, LLC had annual operating expenses of $ 0.5 million and had financial resources that exceeded this amount. Additionally, as of March 31, 2017, Bats Hotspot SEF, LLC, had projected operating expenses from six months of $ 0.6 million and had unencumbered, liquid financial assets that exceeded this amount.

As a designated contract market regulated by the CFTC, CFE is required to meet two capital adequacy tests: (i) its financial resources must be equal to at least twelve months of its projected operating costs and (ii) its unencumbered, liquid financial assets must be equal to at least six months of its projected operating costs. As of March 31, 2017 , CFE had annual projected operating expenses of $ 19.2 million and had financial resources that exceeded this amount. Additionally, as of March 31, 2017 , CFE had projected operating expenses for six months of $ 9.6 million and had unencumbered, liquid financial assets that exceeded this amount.

18. STOCK-BASED COMPENSATION

Stock-based compensation is based on the fair value of the award on the date of grant, which is recognized over the related service period, net of actual forfeitures. The service period is the period over which the related service is performed, which is generally the same as the vesting period. In the first quarter of 2017, the Company adopted ASU 2016-09, Compensation — Stock Compensation . This standard simplifies several aspects of the accounting for stock-based payment transactions (See Note 1).

On February 19, 2017, the Company granted 251,273 restricted stock units ("RSUs"), each of which entitles the holder to one share of common stock upon vesting, to certain officers and employees at a fair value of $80.40 per share. The RSUs vest ratably over three years, with one-third vesting on each anniversary of the grant date, and vesting accelerates upon the occurrence of a change in control. Unvested RSUs will be forfeited if the officer or employee leaves the Company prior to the applicable vesting date, except in limited circumstances. The RSUs have no voting rights but entitle the holder to receive dividend equivalents.

On February 28, 2017, the Company granted 68,254 RSUs, each of which entitles the holder to one share of common stock upon vesting, to certain officers and employees at a fair value of $78.05 per share. The RSUs vest ratably over three years, with one-third vesting on each anniversary of the grant date, and vesting accelerates upon the occurrence of a change in control. Unvested RSUs will be forfeited if the officer or employee leaves the Company prior to the applicable vesting date, except in limited circumstances. The RSUs have no voting rights but entitle the holder to receive dividend equivalents.

On February 28, 2017, the Company granted 49,703 RSUs, each of which entitles the holder to one share of common stock upon vesting, to certain officers and employees at a fair value of $78.05 per share. The RSUs vest on the third anniversary of the grant date, and vesting accelerates upon the occurrence of a change in control. Unvested RSUs will be forfeited if the officer or employee leaves the Company prior to the applicable vesting date, except in limited circumstances. The RSUs have no voting rights but entitle the holder to receive dividend equivalents.

The merger agreement provided that the number of shares of CBOE Holdings common stock into which each such award of CBOE Holdings Restricted Shares is converted will be equal to the number of shares of Bats common stock subject to the corresponding Bats Restricted Share award multiplied by the exchange ratio, which is the sum of (a) 0.3201 of a share of CBOE Holdings common stock and (b) the quotient obtained by dividing $ 10.00 by the volume-weighted average price, rounded to four decimal places, of shares of CBOE Holdings common stock on NASDAQ for the ten consecutive trading day period ending on the second full trading day prior to the effective time of the merger. The remaining service period will be completed post-merger and future vesting and expense will be recognized accordingly. Pursuant to the Merger Agreement, each award of restricted Bats common stock (“Bats restricted shares”) granted under any of the Bats Plans that was unvested immediately prior to the Effective Time was assumed by the Registrant and converted into awards of restricted shares totaling 622,527 of Common Stock at a fair value of $78.05 per share.

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CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

In addition, on February 19, 2017 and February 28, 2017, the Company granted 41,481 and 19,255 RSUs, respectively, contingent on the achievement of performance conditions at a fair value of $111.00 and $102.00 , respectively, per RSU, related to total shareholder return during the performance period. The Company used the Monte Carlo valuation model method to estimate the fair value of the total shareholder return RSUs which incorporated the following assumptions: risk-free interest rate (0.90)% , three-year volatility (21.1)% and three year correlation with S&P 500 Index (0.41) . Each of these performance shares has a performance condition under which the number of units ultimately awarded will vary from 0% to 200% of the original grant, with each unit representing the contingent right to receive one share of our common stock. The vesting period for the RSUs contingent on the achievement of performance is three years . For each of the performance awards, the RSUs will be settled in shares of our common stock following vesting of the RSU assuming that the participant has been continuously employed during the vesting period, subject to acceleration in the event of a change in control of the Company or in the event of a participant’s earlier death or disability. Participants have no voting rights with respect to RSUs until the issuance of the shares of stock. Dividends are accrued by the Company and will be paid once the RSUs contingent on the achievement of performance conditions vest.

For the three months ended March 31, 2017 and 2016, the Company recognized $20.9 million and $3.4 million , respectively, of stock-based compensation expense related to equity awards. For the three months March 31, 2017, the Company recorded $9.1 million of accelerated stock-based compensation expense, respectively, for certain officers and employees as a result of attaining certain age and service based requirements in our long-term incentive plan and award agreements. Stock-based compensation expense is included in compensation and benefits in the condensed consolidated statements of income.

As of March 31, 2017, the Company had unrecognized stock-based compensation expense of $71.1 million . The remaining unrecognized stock-based compensation is expected to be recognized over a weighted average period of 2.7 years .

Pursuant to the Merger Agreement, each outstanding option to purchase Bats common stock (each, a “Bats stock option”) granted under any of the Bats Global Markets, Inc. 2009 Stock Option Plan, the Bats Global Markets, Inc. Third Amended and Restated 2012 Equity Incentive Plan and the Bats Global Markets, Inc. 2016 Omnibus Incentive Plan (collectively, the “Bats Plans”) that was outstanding immediately prior to the effective time of the Merger (the “Effective Time”) was converted into an option to purchase Common Stock, on the same terms and conditions (including vesting schedule) as were applicable to such Bats stock option (but taking into account any changes, including any acceleration of vesting of such Bats stock option occurring by reason of the transactions contemplated by the Merger Agreement). The number of shares of Common Stock subject to each such converted stock option equals the number of shares of Bats common stock subject to the corresponding Bats stock option immediately prior to the Effective Time, multiplied by the exchange ratio (as defined below) (subject to certain adjustments and rounding). The exercise price per share for each such converted stock option equals the per share exercise price specified in the corresponding Bats stock option divided by the exchange ratio (rounded up to the nearest cent). The “exchange ratio” is equal to 0.4452 , which equals the sum of 0.3201 plus the fraction obtained by dividing $10.00 by the volume-weighted average price, rounded to four decimal points, of a share of Common Stock on the NASDAQ Stock Market LLC for the ten consecutive trading days ended February 24, 2017.

Pursuant to the Merger Agreement, each award of restricted Bats common stock (“Bats restricted shares”) granted under any of the Bats Plans that was unvested immediately prior to the Effective Time was assumed by the Registrant and converted into an award of restricted shares of Common Stock, subject to the same terms and conditions (including vesting schedule) that applied to the applicable Bats restricted shares immediately prior to the Effective Time (but taking into account any changes, including any acceleration of vesting of such Bats restricted shares, occurring by reason provided for in the Merger Agreement). The number of shares of Common Stock subject to each such converted award of Bats restricted shares equals the number of shares of Bats common stock subject to the corresponding Bats restricted share award multiplied by the exchange ratio (as defined above).

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CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The activity in the Company's stock options, restricted stock and restricted stock units for the three months ended March 31, 2017 was as follows:

Stock Options

Summary stock option activity is presented below:



	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in millions)



Outstanding, December 31, 2016	—	—		—	—
Granted	683,390	$	22.45	4.8 years	$	40.1
Outstanding at March 31, 2017	683,390	$	22.45	4.8 years	$	40.1
Exercisable at March 31, 2017	602,322	$	19.12	3.8 years	$	37.3
Vested or expected to vest	683,390	$	22.45	4.8 years	$	40.1

The Company estimated the grant date fair value of options awarded during 2017 using the Black-Scholes valuation model with the following assumptions:



	2017
Expected term (in years)	4.2
Expected volatility	19.8%
Expected dividend yield	1.3%
Risk-free rate	1.78%
Forfeiture rate	—%

Summary of the status of nonvested options is presented below:



Nonvested Options	Options	Weighted Average Grant-Date Fair Value


January 1, 2017 - Nonvested	—	$	—
Vested	—	$	—
Granted	81,068	$	49.17
Forfeited	—	$	—
March 31, 2017 - Nonvested	81,068	$	49.17

As of March 31, 2017, there were $ 3.3 million in total unrecognized compensation costs related to stock options. These costs are expected to be recognized over a weighted average period of 1.7 years as the stock options vest.

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CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Restricted Stock and Restricted Stock Units

Summary restricted stock activity is presented below:



	Number of Shares		Weighted Average Grant Date Fair Value



Nonvested stock at December 31, 2016	480,595		$	63.44
Granted	1,052,493		80.48
Vested	(269,427	)	64.86
Forfeited	(1,479	)	70.36
Nonvested stock at March 31, 2017	1,262,182		$	77.34

In the three months ended March 31, 2017, to satisfy employees' tax obligations upon the vesting of restricted stock, the Company purchased 98,208 shares totaling $7.9 million as the result of the vesting of 269,427 shares of restricted stock.

19. INCOME TAXES

The Company records income tax expense during interim periods based on the best estimate of the full year’s tax rate as adjusted for discrete items, if any, that are taken into account in the relevant interim period. Each quarter, the Company updates its estimate of the annual effective tax rate and any change in the estimated rate is recorded on a cumulative basis. The effective tax rate from continuing operations was 16.9% and 38.9% for the three months ended March 31, 2017 and 2016 , respectively. The decrease in the effective tax rate for the three months ended March 31, 2017 against the comparable period in the prior year was due to discrete events during the quarter, mainly the re-measurement of tax reserves, which resulted in a favorable net tax benefit of $4.3 million .

20. NET INCOME PER COMMON SHARE

The computation of basic net income allocated to common stockholders is calculated by reducing net income for the period by dividends paid or declared and undistributed net income for the period that are allocated to participating securities to arrive at net income allocated to common stockholders. Net income allocated to common stockholders is divided by the weighted average number of common shares outstanding during the period to determine net income per share allocated to common stockholders.

The computation of diluted earnings per share is calculated by dividing net income allocated to common stockholders by the sum of the weighted average number of common shares outstanding plus all additional common shares that would have been outstanding if the potentially dilutive common shares had been issued. The dilutive effect is calculated using the more dilutive of the two-class or treasury stock method.

Additionally, in accordance with accounting guidance, the change in the redemption value for the noncontrolling interest reduces net income allocated to common shareholders.

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CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The following table reconciles net income allocated to common stockholders and the number of shares used to calculate the basic and diluted net income per common share for the three ended March 31, 2017 and 2016 :



	Three Months Ended March 31,
(in millions, except per share amounts)	2017			2016
Basic EPS Numerator:
Net Income	$	15.2		$	49.2
Loss attributable to noncontrolling interests	0.3			0.2
Net Income Excluding Noncontrolling Interests	15.5			49.4
Change in redemption value of noncontrolling interest	(0.3		)	—
Earnings allocated to participating securities	(0.1		)	(0.2		)
Net Income Allocated to Common Stockholders	$	15.1		$	49.2
Basic EPS Denominator:
Weighted average shares outstanding	91.9			81.8
Basic Net Income Per Common Share	$	0.16		$	0.60

Diluted EPS Numerator:
Net Income	$	15.2		$	49.2
Loss attributable to noncontrolling interests	0.3			0.2
Net Income Excluding Noncontrolling Interests	15.5			49.4
Change in redemption value of noncontrolling interest	(0.3		)	—
Earnings allocated to participating securities	(0.1		)	(0.2		)
Net Income Allocated to Common Stockholders	$	15.1		$	49.2
Diluted EPS Denominator:
Weighted average shares outstanding	91.9			81.8
Dilutive common shares issued under stock program	0.1			—
Total Dilutive Weighted Average Shares	92.0			81.8
Diluted Net Income Per Common Share	$	0.16		$	0.60

For the periods presented, the Company did not have shares of restricted stock and restricted stock units that would have an anti-dilutive effect on the computation of diluted net income per common share.

21. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

As of March 31, 2017 , the Company was subject to the various legal proceedings and claims discussed below, as well as certain other legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business.

The Company reviews its legal proceedings and claims, regulatory reviews and inspections and other legal proceedings on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and the Company discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for our financial statements to not be misleading. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote. The Company's assessment of whether a loss is reasonably possible or probable is based on its assessment of the ultimate outcome of the matter following all appeals.

As of March 31, 2017 , the Company does not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these reviews, inspections or other legal proceedings, if any, has been incurred. While the consequences of certain unresolved proceedings are not presently determinable, the outcome of any litigation is inherently uncertain and an adverse outcome from certain matters could have a material effect on our earnings in any given reporting

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CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

period. However, in the opinion of management, the ultimate liability is not expected to have a material effect on our financial position, liquidity or capital resources.

The following information updates the legal proceedings disclosures in our Annual Report on Form 10-K for the year ended December 31, 2016.

Providence

On April 18, 2014, the City of Providence, Rhode Island filed a securities class action lawsuit in the Southern District of New York against Bats and Direct Edge Holdings LLC, as well as 14 other securities exchanges. The action purports to be brought on behalf of all public investors who purchased and/or sold shares of stock in the United States since April 18, 2009 on a registered public stock exchange (“Exchange Defendants”) or a U.S.-based alternate trading venue and were injured as a result of the alleged misconduct detailed in the complaint, which includes allegations that the Exchange Defendants committed fraud through a variety of business practices associated with, among other things, what is commonly referred to as high frequency trading. On May 2, 2014 and May 20, 2014, American European Insurance Company and Harel Insurance Co., Ltd. each filed substantially similar class action lawsuits against the Exchange Defendants which were ultimately consolidated with the City of Providence, Rhode Island securities class action lawsuit. On June 18, 2015, the Southern District of New York (the “Court”) held oral argument on the pending Motion to Dismiss and thereafter, on August 26, 2015, the Court issued an Opinion and Order granting Exchange Defendants’ Motion to Dismiss, dismissing the complaint in full. Plaintiff filed a Notice of Appeal of the dismissal on September 24, 2015 and its appeal brief on January 7, 2016. Respondent's brief was filed on April 7, 2016 and oral argument was held on August 24, 2016. Following oral argument, the Court of Appeals issued an order requesting that the SEC submit an amicus brief on whether the Court had jurisdiction and whether the Exchange Defendants have immunity in the claims alleged. The SEC filed its amicus brief with the Court of Appeals on November 28, 2016 and Plaintiff and the Exchange Defendants filed their respective supplemental response briefs on December 12, 2016. Given the preliminary nature of the proceedings, the Company is unable to estimate what, if any, liability may result from this litigation. However, the Company believes that the claims are without merit and intend to litigate the matter vigorously.

SIFMA

Securities Industry Financial Markets Association (“SIFMA”) has filed a number of denial of access applications with the SEC to set aside proposed rule changes to establish or modify fees for CBOE, C2, BZX, BYX, EDGX and EDGA market data products and related services. Each application is being held in abeyance pending a decision on a separate SIFMA denial of access application held before an SEC's administrative law judge (“ALJ”) regarding fees proposed by NASDAQ and the NYSE for their respective market data products. On June 1, 2016, the ALJ issued a decision rejecting SIFMA's denial of access challenge to the NASDAQ and NYSE fees at issue. On July 19, 2016, SIFMA petitioned the SEC for review of the ALJ decision. An adverse ruling in that matter or a subsequent appeal could adversely affect exchange market data fees.

Other

As self-regulatory organizations under the jurisdiction of the SEC, CBOE, C2, BZX, BYX, EDGX and EDGA are subject to routine reviews and inspections by the SEC. As a designated contract market under the jurisdiction of the CFTC, CFE is subject to routine reviews and inspections by the CFTC. Bats Hotspot SEF LLC is a swap execution facility registered with the CFTC and subject to routine reviews and inspections by the CFTC. Bats Trading, Inc. is subject to reviews and inspections by FINRA. The Company has from time to time received inquiries and investigative requests from the SEC's Office of Compliance Inspections and Examinations as well as the Division of Enforcement seeking information about our compliance with our obligations as a self-regulatory organization, the federal securities laws as well as our members’ compliance with the federal securities laws. In addition, while Bats Trading Limited and Chi-X Europe have not been the subject of any material litigation or regulatory investigation in the past, there is always the possibility of such action in the future. As both companies are domiciled in the U.K., it is likely that any action would be taken in the U.K. courts in relation to litigation or by the FCA in relation to any regulatory enforcement action.

The Company is also currently a party to various other legal proceedings in addition to those already mentioned. Management does not believe that the outcome of any of these other reviews, inspections, investigations or other legal proceedings will have a material impact on our consolidated financial position, results of operations or cash flows.

Contractual obligations

The Company currently leases office space, data centers and remote network operations centers, with lease terms remaining from 3 months to 103 months as of March 31, 2017. Total rent expense related to these lease obligations, reflected in

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CBOE Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

technology support services and facilities costs line items on the Consolidated Statements of Income, for the three months ended March 31, 2017 and 2016 were $1.7 million and $1.1 million , respectively. Future minimum payments for our operating leases, contractual obligations, long-term debt and other liabilities for the next five years and thereafter are as follows at March 31, 2017 (in millions):



Year	Operating Leases		Contractual Obligations		Long-term Debt		Other Liabilities		Total
2017	$	3.3	$	25.5	$	—	$	0.7	$	29.5
2018	3.9		31.1		—		49.0		84.0
2019	2.6		31.1		—		—		33.7
2020	2.2		22.8		100.0		—		125.0
2021	1.5		20.1		750.0		—		771.6
2022	0.3		5.0		—		—		5.3
Thereafter	9.2		55.9		650.0		—		715.1
Total	$	23.0	$	191.5	$	1,500.0	$	49.7	$	1,764.2

22. SUBSEQUENT EVENTS

There have been no additional subsequent events that would require disclosure in, or adjustment to, the condensed consolidated financial statements as of and for the quarter ended March 31, 2017 .

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the notes thereto, included in Item 1 in this Quarterly Report on Form 10-Q, and the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, and as contained in that report, the information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” This discussion contains forward-looking information. Please see “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.

Overview

On February 28, 2017, pursuant to the Agreement and Plan of Merger, dated as of September 25, 2016, CBOE Holdings acquired Bats Global Markets, Inc. The three months ended March 31, 2017 included financial results for Bats for the period of March 1, 2017 through March 31, 2017.

Components of Revenues

Transaction Fees

Transaction fees represent fees charged by the Company for the performance obligation of executing a trade on its markets. These fees can be variable based on trade volume tiered discounts, however as all tiered discounts are calculated monthly, and the actual discount is recorded on a monthly basis. Transaction fees, as well as any tiered volume discounts, are calculated and billed monthly in accordance with the Company’s published fee schedules. Transaction fees are recognized across all segments. The Company also pays liquidity payments to customers based on its published fee schedules. The Company uses these payments to improve the liquidity on its markets and therefore recognizes those payments as a cost of revenue.

Access Fees

Access fees represent fees assessed for the opportunity to trade, including fees for trading-related functionality across all segments. They are billed monthly in accordance with the Company’s published fee schedules and recognized on a monthly basis when the performance obligation is met and there is no remaining performance obligation after revenue is recognized.

Exchange Services and Other Fees

To facilitate trading, the Company offers technology services, terminal and other equipment rights, maintenance services, trading floor space and telecommunications services. Trading floor and equipment rights are generally on a month-to-month basis. Facilities, systems services and other fees are generally monthly fee-based, although certain services are influenced by trading volume or other defined metrics, while others are based solely on demand. All fees associated with the trading floor are recognized in the Options segment.

Market Data Fees

Market data fees represent the fees charged by the Company from the U.S. tape plans and fees from customers for proprietary market data. Fees from the U.S. tape plans are collected monthly based on published fee schedules and distributed quarterly to the U.S. exchanges based on a known formula using trading and/or quoting activity. A contract around proprietary market data is entered into and charged on a monthly basis in accordance with the Company’s published fee schedules as the service is provided. Both types of market data are satisfied over time, and revenue is recognized on a monthly basis as the customer receives and consumes the benefit as the Company provides the data. U.S. tape plan market data is recognized in the U.S. Equities and Options segments. Proprietary market data fees are recognized across all segments.

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Regulatory Fees

Regulatory fees primarily represent fees collected by the Company to cover the Section 31 fees charged to the exchanges by the SEC. Consistent with industry practice, the fees charged to customers are based on the fee set by the SEC per notional value of the transaction executed on the Company’s markets and calculated and billed monthly. These fees are recognized in the U.S. Equities and Options segments and as the exchanges are responsible for the ultimate payment to the SEC, the exchanges are considered the principals in these transactions. Regulatory fees also include the options regulatory fee (ORF) which supports the Company’s regulatory oversight function in the Options segment.

Other Revenue

Other revenue primarily includes among other items, revenue from various licensing agreements, all fees related to the trade reporting facility operated in the European Equities segment, and revenue associated with advertisements through the Company’s website.

Components of Cost of Revenues

Liquidity Payments

Liquidity payments are directly correlated to the volume of securities traded on our markets. As mentioned above, we record the liquidity rebate paid to market participants providing liquidity, in the case of C2, BZX, EDGX and Bats Europe, as cost of revenue. BYX and EDGA offer a pricing model pursuant to which we rebate liquidity takers for executing against an order resting on our book, which is also recorded as a cost of revenue.

Section 31 Fees

Exchanges under the authority of the SEC (CBOE, C2, BZX, BYX, EDGX and EDGA) are assessed fees pursuant to the Exchange Act designed to recover the costs to the U.S. government of supervision and regulation of securities markets and securities professionals. We treat these fees as a pass-through charge to customers executing eligible listed cash equities and listed equity options trades. Accordingly, we recognize the amount that we are charged under Section 31 as a cost of revenues and the corresponding amount that we charge our customers as regulatory transaction fees revenue. Since the regulatory transaction fees recorded in revenues are equal to the Section 31 fees recorded in cost of revenues, there is no impact on our operating income. CFE, BTL and Hotspot are not U.S. national securities exchanges, and accordingly do not pay Section 31 fees.

Royalty Fees

Royalty fees primarily consist of license fees paid by us for the use of underlying indexes in our proprietary products usually based on contracts traded. The Company has licenses with the owners of the S&P 500 Index, S&P 100 Index and certain other S&P indexes, the DJIA, MSCI, FTSE Russell indexes and certain other index products. This category also includes fees related to the dissemination of market data related to S&P indexes.

Routing and clearing

Order routing consists of market linkage expenses incurred to send certain orders to other exchanges. In our Options and U.S. Equities business, if a competing exchange quotes a better price, we route the customer's order to that exchange and pay certain of the associated costs. Regardless of whether the transaction is traded on our exchanges, the order flow potential enhances our overall market position and participation and provides cost savings to customers.

Components of Operating Expenses

Compensation and Benefits

Compensation and benefits are our most significant expenses and include salaries and benefits, stock-based compensation, incentive compensation, severance and employer taxes. Salaries and benefits represent our largest expense category and tend to be driven by both our staffing requirements and the general dynamics of the employment market. Stock-based compensation is a non-cash expense related to equity awards. Stock-based compensation can vary depending on the quantity and fair value of the award on the date of grant and the related service period.

Depreciation and Amortization

Depreciation and amortization expense results from the depreciation of long-lived assets purchased and the amortization of purchased and internally developed software, as well as amortization of intangible assets.

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Technology Support Services

Technology support services expense consists primarily of costs related to the maintenance of computer equipment supporting our system architecture, circuits supporting our wide area network, support for production software, fees paid to information vendors for displaying data and off-site system hosting fees.

Professional Fees and Outside Services

Professional fees and outside services consist primarily of consulting services, which include: the supplementation of staff for activities primarily related to systems development and maintenance, legal, regulatory and audit, and tax advisory services.

Acquisition-Related Costs

Acquisition-related and integration costs relate to acquisitions and other strategic opportunities. The acquisition-related transaction costs include fees for investment banking advisors, lawyers, accountants, tax advisors, public relations firms, severance, write-offs of obsolete systems and other external costs directly related to the mergers and acquisitions.

Travel and Promotional Expenses

Travel and promotional expenses primarily consist of advertising, costs for special events, sponsorship of industry conferences, options education seminars and travel-related expenses.

Facilities Costs

Facilities costs primarily consist of expenses related to owned and leased properties including rent, maintenance, utilities, real estate taxes and telecommunications costs.

Other Expenses

Other expenses represent costs necessary to support our operations that are not already included in the above categories.

Other Income/(Expense)

Income and expenses incurred through activities outside of our core operations are considered non-operating and are classified as other income/(expense). These activities primarily include interest earned on the investing of excess cash, interest expense related to outstanding debt facilities, dividend income and equity earnings or losses from our investments in other business ventures.

Business Segments

Options. Our Options segment includes listed market indexes (index options), mostly on an exclusive basis, as well as on non-exclusive "multiply-listed" options, such as options on the stocks of individual corporations (equity options) and options on other exchange-traded products (ETP options), such as exchange-traded funds (ETF options) and exchange-traded notes (ETN options) that occur on CBOE, C2, BZX and EDGX. It also includes the listed equity and ETP options routed transaction services that occur on Trading.

U.S. Equities. Our U.S. Equities segment includes listed cash equities and ETP transaction services that occur on BZX, BYX, EDGX and EDGA. It also includes the listings business where ETPs and the Company are listed on BZX and the recently acquired ETF.com.

Futures. Our Futures segment includes trading of futures on the VIX Index and other products that occur on CFE, our all-electronic futures exchange.

European Equities. Our European Equities segment includes pan‑European listed equities transaction services, ETPs, exchange‑traded commodities, and international depository receipts that occur on our MTF, and a listing and trading venue on our RM, which together we refer to as Bats Europe. It also includes the listed cash equities and exchange-traded products routed transaction services that occur on Chi-X Europe, as well as the listings business where ETPs can be listed on BTL.

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Global FX. Our Global FX segment includes institutional FX services that occur on the Hotspot platform.

General Factors Affecting Results of Operations

In broad terms, our business performance is impacted by a number of drivers, including macroeconomic events affecting the risk and return of financial assets, investor sentiment, the regulatory environment for capital markets, geopolitical events, central bank policies and changing technology, particularly in the financial services industry. Our future revenues and net income will continue to be influenced by a number of domestic and international economic trends, including:


•	trading volumes on our proprietary products such as the VIX options and futures and SPX options;


•	trading volumes in listed cash equity securities and ETPs in both the U.S. and Europe, volumes in listed equity options and volumes in institutional FX trading, which are driven primarily by overall macroeconomic conditions;


•	the demand for the U.S. tape plan market data distributed by the Securities Information Processors (SIPs), which determines the pool size of the industry market data revenue we receive based on our market share;


•	the demand for information about, or access to, our markets, which is dependent on the products we trade, our importance as a liquidity center and the quality and pricing of our data and access services;


•	continuing pressure in transaction fee pricing due to intense competition in the United States and Europe; and


•	regulatory changes relating to market structure or affecting certain types of instruments, transactions, pricing structures, capital market participants or reporting or compliance requirements, including any changes resulting from Brexit.

A number of significant structural, political and monetary issues continue to confront the global economy, and instability could return at any time, resulting in an increased level of market volatility, increased trading volumes and a return of uncertainty. In contrast, many of the largest customers of our transactional businesses continue to adapt their business models as they address the implementation of regulatory changes initiated following the global financial crisis.

Financial Summary

The comparability of our results of operations between reported periods is impacted by the acquisition of Bats on February 28, 2017. Operating results and other financial metrics for U.S. Equities, European Equities and Global FX represent activity for the one month ended March 31, 2017. The following summarizes changes in financial performance for the three months ended March 31, 2017 and 2016 .



	Three Months Ended March 31,						Increase/			Percent
	2017			2016			(Decrease)			Change
	(in millions, except trading days, percentages and as noted below)
Total revenues	$	356.2		$	170.5		$	185.7		108.9	%
Total cost of revenues	162.8			27.4			135.4			494.2	%
Revenues less cost of revenues	193.4			143.1			50.3			35.2	%
Total operating expenses	167.3			63.6			103.8			163.1	%
Operating income	26.1			79.5			(53.5		)	(67.2	)%
Income before income tax provision	18.3			80.5			(62.2		)	(77.3	)%
Income tax provision	3.1			31.3			(28.2		)	(90.1	)%
Net income	15.2			49.2			(34.0		)	(69.1	)%
Net income allocated to common stockholders	$	15.1		$	49.2		$	(34.1	)	(69.3	)%
Basic earnings per share	$	0.16		$	0.60		$	(0.44	)	(72.5	)%
Diluted earnings per share	0.16			0.60			(0.44		)	(72.5	)%
Organic net revenue (1)	154.2			143.1			11.1			7.8	%
EBITDA(2)	51.2			91.7			(40.4		)	(44.1	)%
EBITDA margin(3)	26.5		%	64.1		%	(37.6		)%	*
Adjusted EBITDA(2)	$	125.7		$	92.6		$	33.2		35.9	%
Adjusted EBITDA margin(4)	65.0		%	64.7		%	0.3		%	*
Adjusted earnings(5)	$	72.2		$	49.9		$	22.3		44.8	%
Diluted weighted average shares outstanding	92.0			81.8			10.2			44.7	%

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Diluted adjusted earnings per share	$	0.78		$	0.61		$	0.17		27.9	%
Options:
Average Daily Volume (ADV):
Matched contracts	5.6			4.6			1.0			21.7	%
Routed contracts	—			—			—			*
Total touched contracts	5.6			4.6			1.0			21.7	%
Market ADV	16.6			17.1			(0.5		)	(2.9	)%
Index contract ADV	1.9			1.8			0.1			5.6	%
Trading days	62			61			1			1.6	%
U.S. Equities:
ADV:
Matched shares ADV (in billions)	1.3			—			1.3			*
Routed shares ADV (in billions)	0.1			—			0.1			*
Total touched shares ADV (in billions)	1.4			—			1.4			*
Market ADV (in billions)	6.9			—			6.9			*
Trading days	23			—			23			*
U.S. ETPs: launches (number of launches)	15			—			15			*
U.S. ETPs: listings (number of listings)	159			—			159			*
Futures:
ADV (in thousands)	255.2			216.4			38.8			17.9	%
Trading days	62			61			1			1.6	%
European Equities:
Average Daily Notional Value (ADNV):
Matched and touched ADNV (in billions)	€	10.2		€	—		€	10.2		*
Market ADNV (in billions)	€	47.4		€	—		€	47.4		*
Trading days	23			—			23			*
Average Euro/British pound exchange rate	£	0.866		£	—		£	0.866		*
Global FX:
ADNV (in billions)	$	29.7		$	—		$	29.7		*
Trading days	23			—			23			*
Market share:
Options	33.7		%	26.6		%	7.1		%	*
U.S. Equities	19.2		%	—		%	19.2		%	*
ETPs	21.7		%	—		%	21.7		%	*
ETPs: launches	32.6		%	—		%	32.6		%	*
ETPs: listings	8.0		%	—			8.0		%	*
European Equities	21.4		%	—			21.4		%	*
Net capture:
Total Options (revenue per contract)(6)	$	0.287		$	0.346		$	0.022		8.3	%
Multiply Listed Options	0.068			0.100			(0.013		)	(16.0	)%
Index Options	0.708			0.720			(0.012		)	(1.7	)%
U.S. Equities (net capture per one hundred touched shares)(7)	0.024			—			0.024			*
Futures	1.814			1.643			0.171			10.4	%
European Equities (net capture per matched notional value in basis points)(8)	0.161			—			0.161			*
Global FX (net capture per one million dollars traded)(9)	$	2.61		$	—		$	2.61		*
Average British pound/U.S. dollar exchange rate	$	1.234		$	1.432		$	(0.198	)	*

* Not meaningful

(1)

Organic net revenue is defined as revenues less cost of revenues excluding revenues less cost of revenues of any acquisition for the quarter the business was acquired. Organic net revenue does not represent, and should not be considered as, an alternative to revenues less cost of revenues, or net revenue, as determined in accordance with GAAP. We have presented organic net revenue because we consider it an important supplemental measure of our performance and we use it as the basis for monitoring our operating financial performance before the effects of acquisitions. We also believe that it is

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frequently used by analysts, investors and other interested parties in the evaluation of companies. We believe that investors may find this non-GAAP measure useful in evaluating our performance compared to that of peer companies in our industry. Other companies may calculate organic net revenue differently than we do. Organic net revenue has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.

The following is a reconciliation of revenues less cost of revenues to organic net revenue (in millions):



	Three Months Ended March 31
	2017			2016
Revenues less cost of revenues	$	193.4		$	143.1
Recent acquisitions:
Bats revenues less cost of revenues (for the one month ended March 31, 2017)	(39.2		)	—
Organic net revenue	$	154.2		$	143.1

(2)

EBITDA is defined as income before interest, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before acquisition-related costs and accelerated stock-based compensation. EBITDA and adjusted EBITDA do not represent, and should not be considered as, alternatives to net income or cash flows from operations, each as determined in accordance with GAAP. We have presented EBITDA and adjusted EBITDA because we consider them important supplemental measures of our performance and believe that they are frequently used by analysts, investors and other interested parties in the evaluation of companies. In addition, we use adjusted EBITDA as a measure of operating performance for preparation of our forecasts, evaluating our leverage ratio for the debt to earnings covenant included in our outstanding credit facility. Other companies may calculate EBITDA and adjusted EBITDA differently than we do. EBITDA and adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP.

The following tables are reconciliations of net income to EBITDA and adjusted EBITDA (in millions):



	Three Months Ended March 31, 2017
	Options		U.S. Equities		Futures		European Equities		Global FX			Corporate Items and Eliminations			Total
Net income (loss)	$	62.8	$	11.9	$	25.9	$	1.0	$	(1.1	)	$	(85.4	)	$	15.1
Interest	—		—		—		—		—			7.9			7.9
Income tax provision	2.1		0.3		—		0.7		—			—			3.1
Depreciation and amortization	10.9		8.1		0.3		2.5		3.0			0.3			25.1
EBITDA	75.8		20.3		26.2		4.2		1.9			(77.2		)	51.2
Acquisition-related costs	—		—		—		—		0.2			65.2			65.4
Accelerated stock-based compensation	—		—		—		—		—			9.1			9.1
Adjusted EBITDA	$	75.8	$	20.3	$	26.2	$	4.2	$	2.1		$	(2.9	)	$	125.7



	Three Months Ended March 31, 2016
	Options			U.S. Equities		Futures		European Equities		Global FX		Corporate Items and Eliminations			Total
Net income (loss)	$	34.7		$	—	$	17.5	$	—	$	—	$	(3.0	)	$	49.2
Interest	(0.7		)	—		—		—		—		—			(0.7		)
Income tax provision	31.3			—		—		—		—		—			31.3
Depreciation and amortization	10.7			—		0.9		—		—		0.3			11.9
EBITDA	76.0			—		18.4		—		—		(2.7		)	91.7
Acquisition-related costs	—							—		—		0.4			0.4
Assessment of computer-based lease taxes	—			—		—		—		—		0.3			0.3
Compensation and benefits	—			—		—		—		—		0.2			0.2
Adjusted EBITDA	$	76.0		$	—	$	18.4	$	—	$	—	$	(1.8	)	$	92.6


(3)	EBITDA margin represents EBITDA divided by revenues less cost of revenues.


(4)	Adjusted EBITDA margin represents adjusted EBITDA divided by revenues less cost of revenues.

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(5)

Adjusted earnings is defined as net income adjusted for amortization of purchased intangibles, acquisition-related costs and accelerated stock-based compensation, net of the income tax effects of these adjustments. Adjusted earnings does not represent, and should not be considered as, an alternative to net income, as determined in accordance with GAAP. We have presented adjusted earnings because we consider it an important supplemental measure of our performance and we use it as the basis for monitoring our own core operating financial performance relative to other operators of electronic exchanges. We also believe that it is frequently used by analysts, investors and other interested parties in the evaluation of companies. We believe that investors may find this non-GAAP measure useful in evaluating our performance compared to that of peer companies in our industry. Other companies may calculate adjusted earnings differently than we do. Adjusted earnings has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.

The following is a reconciliation of net income to adjusted earnings (in millions):



	Three Months Ended March 31
	2017			2016
Net income	$	15.1		$	49.2
Amortization	14.4			0.2
Acquisition-related costs	65.4			0.4
Acceleration of stock based compensation	9.1			0.2
Interest expenses on bridge financing	4.3			—
Assessment of computer-based lease taxes	—			0.3
Change in redemption value of noncontrolling interest	0.3			—
Tax effects of adjustments	(36.0		)	(0.4		)
Net income allocated to participating securities	(0.4		)	—
Adjusted earnings	$	72.2		$	49.9


(6)	Revenue per contract represents transaction fees less liquidity payments and routing and clearing costs

divided by total touched contracts.


(7)	Net capture per one hundred touched shares refers to transaction fees less liquidity payments and routing and clearing costs divided by the product of one-hundredth ADV of touched shares on BZX, BYX, EDGX and EDGA and the number of trading days for the period.


(8)	Net capture per matched notional value refers to transaction fees less liquidity payments in British pounds divided by the product of ADNV in British pounds of shares matched on Bats Europe and the number of trading days for the period.


(9)	Net capture per one million dollars traded refers to transaction fees less liquidity payments, if any, divided by the product of one-thousandth of ADNV traded on the Hotspot FX market and the number of trading days, divided by two, which represents the buyer and seller that are both charged on the transaction for the period.

Revenues

Total revenues increased in the three months ended March 31, 2017 , primarily as a result of our acquisition of Bats.

The following summarizes changes in revenues for the three months ended March 31, 2017 , compared to the three months ended March 31, 2016 :



	Three Months Ended March 31				Increase/ (Decrease)		Percent Change
	2017		2016		Increase/ (Decrease)		Percent Change
	(in millions, except percentages)
Transaction fees	$	256.4	$	126.2	$	130.2	103.2	%
Access fees	17.8		13.2		4.6		34.8	%
Exchange services and other fees	15.4		11.4		4.0		35.1	%
Market data fees	22.5		8.0		14.5		181.3	%
Regulatory fees	38.3		9.1		29.2		320.9	%
Other revenue	5.8		2.6		3.2		123.1	%
Total revenues	$	356.2	$	170.5	$	185.7	108.9	%

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Transaction Fees

Transaction fees increased for the three months ended March 31, 2017 compared to the same period in 2016 primarily driven by the acquisition of Bats that contributed $111.0 million. In addition to the merger-related items, the increase in transaction fees was primarily due to higher trading volume, primarily driven by SPX options and VIX futures, partially offset by a decrease in average options revenue per contract.

Access fees

Access fees increased for the three months ended March 31, 2017 compared to the same period in 2016 primarily driven by the Bats acquisition that contributed $5.9 million.

Exchange services and other fees

Exchange services and other fees increased for the three months ended March 31, 2017 compared to the same period in 2016 primarily driven by the Bats acquisition that contributed $2.5 million.

Market Data Fees

Market data fees increased for the three months ended March 31, 2017 compared to the same period in 2016 primarily due to the Bats acquisition that contributed $13.0 million.

Regulatory Fees

Regulatory transaction fees increased for the three months ended March 31, 2017 compared to the same period in 2016 primarily due to the acquisition of Bats that contributed $26.6 million.

Other Revenue

Other revenue increased for the three months ended March 31, 2017 compared to the same period in 2016 primarily due to an increase in licensing revenue. Also contributing to the increase was incremental revenue from the Bats acquisition of $0.8 million.

Cost of Revenues

Cost of revenues increased in the three months ended March 31, 2017 compared to the same period in 2016 primarily due to the acquisition of Bats.

The following summarizes changes in cost of revenues for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 :



	Three Months Ended March 31				Increase/ (Decrease)		Percent Change
	2017		2016		Increase/ (Decrease)		Percent Change
	(in millions, except percentages)
Liquidity payments	$	105.3	$	6.6	$	98.7	*
Section 31 fees	30.0		—		30.0		*
Royalty fees	21.2		19.1		2.1		11.0	%
Routing and clearing	6.3		1.7		4.6		270.6	%
Total cost of revenues	$	162.8	$	27.4	$	135.4	494.2	%

Liquidity Payments

Liquidity payments increased for the three months ended March 31, 2017 compared to the same period in 2016 primarily driven by the Bats acquisition that contributed $91.0 million.

Section 31 Fees

Section 31 fees increased for the three months ended March 31, 2017 compared to the same periods in 2016 primarily driven by the Bats acquisition that contributed $26.3 million.

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Royalty Fees

Royalty fees increased for the three months ended March 31, 2017 compared to the same periods in 2016 primarily due to higher trading volume in licensed products.

Routing and Clearing

The increase in routing and clearing fees for the three months ended March 31, 2017 compared to the same periods in 2016 was primarily driven by the Bats acquisition that contributed $3.2 million.

Revenues Less Cost of Revenues

Revenues less cost of revenues increased in the three months ended March 31, 2017 compared to the same period in 2016 primarily due to the acquisition of Bats.

The following tables summarize the components of revenues less cost of revenues for the three months ended March 31, 2017 , presented as a percentage of revenues less cost of revenues and compared to the three months ended March 31, 2016 :



									Percentage of Revenues Less Cost of Revenues
	Three Months Ended March 31						Percent		Three Months Ended March 31
	2017			2016			Change		2017		2016
	(in millions)
Transaction fees less liquidity payments and routing and clearing costs	$	144.8		$	117.9		22.8	%	74.9	%	82.4	%
Access fees	17.8			13.2			34.8	%	9.2	%	9.2	%
Exchange services and other fees	15.4			11.4			35.1	%	8.0	%	8.0	%
Market data fees	22.5			8.0			181.3	%	11.6	%	5.6	%
Regulatory fees, less Section 31 fees	8.3			9.1			(8.8	)%	4.3	%	6.4	%
Royalty fees	(21.2		)	(19.1		)	11.0	%	(11.0	)%	(13.4	)%
Other	5.8			2.6			123.1	%	3.0	%	1.8	%
Revenues less cost of revenues	$	193.4		$	143.1		35.2	%	100.0	%	100.0	%

Transaction Fees Less Liquidity Payments and Routing and Clearing Costs

Transaction fees less liquidity payments and routing and clearing costs increased in the three months ended March 31, 2017 compared to the same period in 2016 primarily driven by the acquisition of Bats that contributed $39.2 million. In addition to the merger-related items, the increase was primarily due to higher trading volume, primarily driven by SPX options and VIX futures, partially offset by a decrease in average options revenue per contract.

Access Fees

Access fees increased in the three months ended March 31, 2017 compared to the same period in 2016 primarily driven by the Bats acquisition that contributed $5.9 million.

Exchange Services and Other Fees

Exchange services and other fees increased for the three months ended March 31, 2017 compared to the same periods in 2016 primarily driven by the Bats acquisition that contributed $2.5 million.

Market Data Fees

Market data fees increased in the three months ended March 31, 2017 compared to the same period in 2016 primarily driven by the Bats acquisition that contributed $13.0 million.

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Regulatory Fees less Section 31 Fees

Regulatory fees decreased in the three months ended March 31, 2017 compared to the same period in 2016 primarily due to a decrease in options regulatory fees.

Other

Other revenue increased in the three months ended March 31, 2017 compared to the same period in 2016 primarily due to an increase in licensing revenue. Also contributing to the increase was incremental revenue from the Bats acquisition of $0.8 million.

Operating Expenses

Total operating expenses increased 163.1% for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily due to acquisition-related costs of $65.2 million for the Bats acquisition. Incremental operating expense of Bats from the acquisition date to March 31, 2017 also drove operating expense increases primarily in depreciation and amortization and compensation and benefits. The following summarizes changes in operating expenses for the three months ended March 31, 2017 , compared to the three months ended March 31, 2016 :



	Three Months Ended March 31				Increase/		Percent
	2017		2016		(Decrease)		Change
	(in millions, except percentages)
Operating expenses:
Compensation and benefits	$	47.8	$	27.1	$	20.7	76.4	%
Depreciation and amortization	25.1		11.9		13.2		110.9	%
Technology support services	7.5		5.7		1.8		31.6	%
Professional fees and outside services	14.4		13.6		0.8		5.9	%
Travel and promotional expenses	3.3		2.5		0.8		32.0	%
Facilities costs	2.1		1.5		0.6		40.0	%
Acquisition-related costs	65.2		—		65.2		*
Change in contingent consideration	0.2		—		0.2		*
Other expenses	1.7		1.3		0.4		30.8	%
Total operating expenses	$	167.3	$	63.6	$	103.7	163.1	%

* Not meaningful

Compensation and Benefits

Compensation and benefits increased for the three months ended March 31, 2017 compared to the same period in 2016 primarily driven by $9.1 million of accelerated stock compensation expense recognized in the first quarter of 2017. Also contributing to the increase was $7.3 million of incremental costs for additional employees from the Bats acquisition.

Depreciation and Amortization

Depreciation and amortization increased for the three months ended March 31, 2017 compared to the same periods in 2016 primarily driven by amortization of purchased intangible assets acquired from the acquisition of Bats.

Technology Support Services

Systems and data communication costs increased for the three months ended March 31, 2017 compared to the same periods in 2016 primarily driven by incremental expense from the acquisition of Bats.

Professional and Outside Services

Professional and contract services fees increased for the three months ended March 31, 2017 compared to the same period in 2016 primarily driven by incremental expense from the acquisition of Bats.

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Acquisition-related costs

Acquisition-related costs increased for the three months ended March 31, 2017 compared to the same period in 2016 primarily driven by our acquisition of Bats. Acquisition-related costs include fees for investment banking advisors, lawyers, accountants, tax advisors, public relations firms, severance costs, impairment of capitalized software and other external costs directly related to the mergers and acquisitions.

Operating Income

As a result of the items above, operating income for the three months ended March 31, 2017 was $ 26.1 million compared to $79.5 million for same period in 2016.

Interest Expense, Net

Net interest expense increased in the three months ended March 31, 2017 primarily due to $8.5 million in interest expense related to the financing of the Bats acquisition, offset by $0.6 million in interest income. To finance the cash required for the acquisition, we entered into a $1.0 billion term loan agreement and $650 million in 3.650% senior notes. See Note 11, Debt, to the condensed consolidated financial statements for a discussion of debt agreements.

Other Income

Other income increased stayed relatively flat for the three months ended March 31, 2017 compared to the three months ended March 31, 2016.

Income Before Income Tax Provision

As a result of the above, income before income tax provision for the three months ended March 31, 2017 was $18.3 million compared to $80.5 million for the same period in 2016, a decrease of $62.2 million.

Income Tax Provision

For the three months ended March 31, 2017 , the income tax provision was $3.1 million compared with $31.3 million for the same period in 2016. The effective tax rate for the three months ended March 31, 2017 was 16.9% compared to 38.9% for the three months ended March 31, 2016 . The decrease in the effective tax rate for the three months ended March 31, 2017 against the comparable period in the prior year was due to discrete events during the quarter, mainly the re-measurement of tax reserves, which resulted in a favorable net tax benefit of $4.3 million.

Net Income

As a result of the items above, net income for the three months ended March 31, 2017 was $15.2 million compared to $49.2 million for the three months ended March 31, 2016 , an decrease of $34 million.

Segment Operating Results

We previously operated as a single reportable business segment as of December 31, 2016 . As a result of the Merger, as of March 31, 2017 , the Company is reporting five segments: Options, U.S. Equities, Futures, European Equities, and Global FX. Segment performance is primarily based on operating income (loss). The Company's chief decision maker does not review total assets or inter-segment revenues by segment, therefore, such information is not presented. The Company has aggregated all of its corporate costs, acquisition-related costs, as well as other business ventures, within Corporate Items and Eliminations unit based on the decision that those activities should not be used to evaluate the segment's operating performance; however, operating expenses that relate to activities of a specific segment have been allocated to that segment.

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The following summarizes our total revenues by segment (in millions):



							Percentage of Total Revenues
	Three Months Ended March 31,				Percent Change		Three Months Ended March 31,
	2017		2016		Percent Change		2017		2016
Options	$	192.7	$	148.6	29.7	%	54.1	%	87.2	%
U.S. Equities	120.2		—		*		33.7	%	—	%
Futures	29.9		21.9		36.5	%	8.4	%	12.8	%
European Equities	9.3		—		*		2.6	%	—	%
Global FX	4.0		—		*		1.1	%	—	%
Corporate Items and Eliminations	0.1		—		*		—	%	—	%
Total revenues	$	356.2	$	170.5	108.9	%	100.0	%	100.0	%

* Not meaningful

Options

The following summarizes revenues less cost of revenues, operating expenses, operating income, and EBITDA for our Options segment:



	Three Months Ended March 31						Percent
	2017			2016			Change
	(in millions, except percentages)
Revenues less cost of revenues	$	128.9		$	122.1		5.6	%
Operating expenses	63.9			57.1			11.9	%
Operating income	$	65.0		$	65.0		—	%

EBITDA (1)	$	75.8		$	76.0		(0.3	)%
EBITDA margin (2)	58.8		%	62.2		%	*

* Not meaningful

(1) See footnote (1) to the table under “Financial Summary” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.

(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.

For the three months ended March 31, 2017 , the Options segment’s operating income was flat compared to the three months ended March 31, 2016 . Revenues less cost of revenues increased $6.8 million for the three months ended March 31, 2017 , compared to the three months ended March 31, 2016 , primarily driven by our acquisition of Bats and a 5.6% increase in index ADV partially offset by a 1.7% decrease in index options RPC.

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U.S. Equities

The following summarizes revenues less cost of revenues, operating expenses, operating income, and EBITDA for our U.S. Equities segment:



	Three Months Ended March 31					Percent
	2017			2016		Change
	(in millions, except percentages)
Revenues less cost of revenues	$	25.5		$	—	*
Operating expenses	13.3			—		*
Operating income	$	12.2		$	—	*

EBITDA (1)	$	20.3		$	—	*
EBITDA margin (2)	79.6		%	*		*

* Not meaningful

(1) See footnote (1) to the table under “Financial Summary” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.

(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.

For the three months ended March 31, 2017 , U.S. Equities contributed revenues less costs of revenues of $25.5 million and operating income of $12.2 million resulting from our acquisition of Bats on February 28, 2017.

Futures

The following summarizes revenues, operating expenses, operating income, and EBITDA for our Futures segment:




	Three Months Ended March 31						Percent
	2017			2016			Change
	(in millions, except percentages)
Total revenues	$	29.9		$	21.9		36.5	%
Operating expenses	2.9			3.5			(17.1	)%
Operating income	$	25.9		$	17.5		48.0	%

EBITDA (1)	$	26.2		$	18.4		42.4	%
EBITDA margin (2)	91.0		%	87.6		%	*

* Not meaningful

(1) See footnote (1) to the table under “Financial Summary” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.

(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.

For the three months ended March 31, 2017 compared to the same period in 2016 , the operating income increased $8.4 million, primarily driven by a 17.9% increase in ADV, from 216.4 thousand contracts per day in 2016 to 255.2 thousand contracts per day in 2017 and a 10.4% increase in revenue per contract.

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European Equities

The following summarizes revenues less cost of revenues, operating expenses, operating income, and EBITDA for our European Equities segment:



	Three Months Ended March 31					Percent Change
	2017			2016		Percent Change
	(in millions, except percentages)
Revenues less cost of revenues	$	6.1		$	—	*
Operating expenses	4.5			—		*
Operating income	$	1.6		$	—	*

EBITDA (1)	$	4.2		$	—	*
EBITDA margin (2)	71.2		%	*		*

* Not meaningful

(1) See footnote (1) to the table under “Financial Summary” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.

(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.

For the three months ended March 31, 2017 , the European Equities segment contributed revenues less cost of revenues of $6.1 million and operating income of $1.6 million resulting from our acquisition of Bats on February 28, 2017.

Global FX

The following summarizes revenues, cost of revenues, operating expenses and operating income for our Global FX segment:



	Three Months Ended March 31					Percent Change
	2017			2016		Percent Change
	(in millions, except percentages)
Revenues less cost of revenues	$	4.0		$	—	*
Operating expenses	5.2			—		*
Operating (loss) income	$	(1.2	)	$	—	*

EBITDA (1)	$	1.9		$	—	*
EBITDA margin (2)	47.5		%	*		*

* Not meaningful

(1) See footnote (1) to the table under “Financial Summary” above for a reconciliation of net income to EBITDA and adjusted EBITDA, and management’s reasons for using such non-GAAP measures.

(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.

For the three months ended March 31, 2017 , the Global FX segment contributed revenues less cost of revenues of $4.0 million and an operating loss of $1.2 million resulting from our acquisition of Bats on February 28, 2017.

Seasonality

In the securities and FX industries, quarterly revenue fluctuations are common and are due primarily to seasonal variations in trading volumes, as well as competition and technological and regulatory changes. Our business may experience seasonal fluctuations, reflecting reduced trading activity.

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Liquidity and Capital Resources

Historically, we have financed our operations, capital expenditures and other cash needs through cash generated from operations. Our cash requirements principally consisted of funding operating expenses, capital expenditures, actual and anticipated quarterly and special dividend payments and common stock repurchases under the previously announced program. We expect our cash on hand at March 31, 2017 and other available resources to be sufficient to continue to meet our 2017 cash requirements. In the near term, we expect that our operations and availability under our revolving credit facility will meet our cash needs to fund our operations, capital expenditures, debt repayments and any dividends. See Note 11 “Debt” of the condensed consolidated financial statements for further information. Our long-term cash needs will depend on many factors including an introduction of new products, enhancements of current products, the geographic mix of our business and any potential acquisitions. We believe our operations and the availability under our revolving credit facility will meet any long-term needs unless an acquisition is identified.

Cash and cash equivalents include cash in banks and all non-restricted, highly liquid investments with original maturities of three months or less at the time of purchase. Cash and cash equivalents as of March 31, 2017 increased $56.0 million from December 31, 2016 primarily driven by the proceeds from long-term debt offset by the Bats acquisition and changes in various other balance sheet accounts. See “—Cash Flow” below for further discussion.

Our cash and cash equivalents held outside of the United States in various foreign subsidiaries totaled $38.1 million as of March 31, 2017 . The remaining balance was held in the United States and totaled $115.2 million as of March 31, 2017 . No cash or cash equivalents was held outside of the United States as of December 31, 2016. The majority of cash held outside the United States is available for repatriation, but under current law, could subject us to additional United States income taxes, less applicable foreign tax credits. In connection with ETF.com, we have $1.8 million of restricted cash held to be paid to the sellers of ETF.com within 18 months after acquisition date upon release of seller indemnifications per the terms of the acquisition agreement.

Our financial investments include investments with original or acquired maturities longer than three months but that mature in less than one year from the statement of financial condition date and are recorded at fair value. As of March 31, 2017 and December 31, 2016 , financial investments primarily consisted of U.S. Treasury securities.

Cash Flow

The following table summarizes our cash flow data for the three months ended March 31, 2017 :



	Three Months Ended March 31
	2017			2016
Net cash (used in) provided by operating activities	$	(17.7	)	$	97.4
Net cash used in investing activities	(1,386.8		)	(27.9		)
Net cash provided by (used in) financing activities	1,457.7			(64.3		)
Effect of foreign currency exchange rate changes on cash and cash equivalents	2.8			—
	$	56.0		$	5.2

Net Cash Flows (Used in) Provided by Operating Activities

During the three months ended March 31, 2017 , net cash provided by operating activities was $32.9 million less than net income. The variance is primarily attributed to our acquisition of Bats. As a result of the acquisition we acquired Section 31 fees payable totaling $71.7 million as of March 31, 2017 . This amount was partially offset by a non-cash adjustment for depreciation and amortization of $25.1 million, stock-based compensation expense of $20.9 million and the impairment of asset of $14.8 million.

Net Cash Flows Used in Investing Activities

Net cash flows used in investing activities for the three months ended March 31, 2017 and 2016 were $1,386.8 million and $27.9 million. The variance is primarily attributed to our acquisition of Bats on February 28, 2017.

Net Cash Flows Provided by (Used in) Financing Activities

Net cash flows provided by (used in) financing activities for the three months ended March 31, 2017 and 2016 were $1,449.6 million and $(64.3) million, respectively. We received proceeds from long-term debt of $1,644.3 million while making principal payments on long-term debt of $150.0 million and paying dividends totaling $28.3 million.

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Financial Assets

The following summarizes our financial assets as of March 31, 2017 and December 31, 2016 (in millions):



	March 31, 2017			December 31, 2016
Cash and cash equivalents	$	153.3		$	97.3
Financial investments	41.3			—
Cash collected for Section 31 fees	(41.0		)	—
Adjusted cash (1)	$	153.6		$	97.3

(1) Adjusted cash is a non-GAAP measure and represents cash and cash equivalents minus cash collected for Section 31 fees, which will need to be remitted in the near term. We have presented adjusted cash because we consider it an important supplemental measure of our liquidity and believe that it is frequently used by analysts, investors and other interested parties in the evaluation of companies.

Debt

The following summarizes our debt obligations as of March 31, 2017 and December 31, 2016 (in millions):




	March 31, 2017		December 31, 2016
Term loans outstanding	$	843.3	$	—
3.650% Senior Notes	643.4		—
Revolving credit facility	—		—
Long-term debt	$	1,486.7	$	—

As of March 31, 2017 and December 31, 2016 , we were in compliance with the covenants of our debt agreements.

In addition to the debt outstanding, as of March 31, 2017 , we had an additional $150.0 million available through our revolving credit facility. Together with adjusted cash, we had $303.6 million available to fund our operations, capital expenditures, potential acquisitions, debt repayments and any dividends as of March 31, 2017 .

Commercial Commitments and Contractual Obligations

As of March 31, 2017 , our commercial commitments and contractual obligations included real property leases, operating leases, data and telecommunications agreements, equipment leases, our long-term debt outstanding, contingent consideration and other obligations. See Note 21, Commitments and Contingencies, to the condensed consolidated financial statements for a discussion of commitments and contingencies.

Off Balance Sheet Arrangements

As of March 31, 2017 and December 31, 2016 , we did not have any off-balance sheet arrangements.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

As a result of our operating activities, we are exposed to market risks such as foreign currency exchange rate risk, equity risk and credit risk. We have implemented policies and procedures to measure, manage and monitor and report risk exposures, which are reviewed regularly by management and our board of directors.

Foreign Currency Exchange Rate Risk

As a result of the acquisition of Bats, we expanded our operations in Europe and now have operations in Asia and are subject to increased currency translation risk as revenues and expenses are denominated in foreign currencies, primarily the British pound, Singapore dollar and the Euro. We also have de minimis exposure to other foreign currencies, including the Swiss Franc, Norwegian Kroner, Swedish Krona and Danish Kroner.

For the three months ended March 31, 2017 , our exposure to foreign-denominated revenues and expenses is presented by primary foreign currency in the following table:



	Three Months Ended March 31, 2017						Three Months Ended March 31, 2016
	Euro(1)			British Pound (1)			Euro(1)			British Pound (1)
Foreign denominated % of:
Revenues	1.1		%	1.1		%	1.1		%	1.1		%
Cost of revenues	—		%	—		%	—		%	—		%
Operating expenses	—		%	—			—		%	—
Impact of 10% adverse currency fluctuation on:
Revenues	$	4.1		$	3.8		$	4.1		$	3.8
Cost of revenues	—			—			—			—
Operating expenses	—			—			—			—

(1) An average foreign exchange rate to the U.S. dollar for the period was used.

Equity Risk

Our investment in European operations is exposed to volatility in currency exchange rates through translation of our net assets or equity to U.S. dollars. The assets and liabilities of our European business are denominated in British pounds. Fluctuations in currency exchange rates may create volatility in our reported results as we are required to translate foreign currency reported statements of financial condition and income into U.S. dollars for consolidated reporting. The translation of these non-U.S. dollar statements of financial condition into U.S. dollars for consolidated reporting results in a cumulative translation adjustment, which is recorded in accumulated other comprehensive loss (income) within stockholders' equity on our consolidated statements of financial condition. Our primary exposure to this equity risk as of March 31, 2017 is presented by foreign currency in the following table:



	British Pound (1)
	(in millions)
Net equity investment in Bats Europe	$	654.2
Impact on consolidated equity of a 10% adverse currency fluctuation	$	65.4

(1) Converted to U.S. dollars using the foreign exchange rate of British pounds into U.S. dollars as of March 31, 2017 .

Credit Risk

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We are exposed to credit risk from third parties, including customers, counterparties and clearing agents. These parties may default on their obligations due to bankruptcy, lack of liquidity, operational failure or other reasons. We limit our exposure to credit risk by selecting the counterparties with which we make investments and execute agreements.

We do not have counterparty credit risk with respect to trades matched on our exchanges in the U.S and Europe. With respect to listed cash equities, we deliver matched trades of our customers to NSCC without taking on counterparty risk for those trades. NSCC acts as a central counterparty on all transactions occurring on BZX, BYX, EDGX and EDGA and, as such, guarantees clearance and settlement of all of our matched equity trades. Similarly, with respect to U.S. listed equity options, we deliver matched trades of our customers to the OCC, which acts as a central counterparty on all transactions occurring on CBOE, C2, BZX, EDGX and CFE and, as such, guarantees clearance and settlement of all of our matched options and futures trades.

With respect to orders Bats Trading routes to other markets for execution on behalf of our customers, Bats Trading is exposed to some counterparty credit risk in the case of failure to perform on the part of our clearing firms, Morgan Stanley or Wedbush Securities. Morgan Stanley and Wedbush Securities guarantee trades until one day after the trade date, after which time NSCC provides a guarantee. Thus, Bats Trading is potentially exposed to credit risk to the counterparty to a trade routed to another market center between the trade date and one day after the trade date in the event that Morgan Stanley or Wedbush Securities fails. We believe that any potential requirement for us to make payments under these guarantees is remote and accordingly, have not recorded any liability in the consolidated financial statements for these guarantees.

Similarly, with respect to orders in U.S. listed equity options, we route orders for execution to other national securities exchanges through either Bats Trading or through affiliates of Bank of America Merrill Lynch, Wedbush Securities, Wolverine Execution Services, L.L.C. (“WEX”) and Compass Professional Services, L.L.C. (“Compass”). Bats Trading has counterparty credit risk exposure to these firms until a trade settles (generally one day after the trade date). We believe that any potential requirement for us to make payments under these guarantees is remote. Accordingly, we have not recorded any liability in our consolidated financial statements for these guarantees.

Historically, we have not incurred any liability due to a customer’s failure to satisfy its contractual obligations as counterparty to a system trade. Credit difficulties or insolvency, or the perceived possibility of credit difficulties or insolvency, of one or more larger or visible market participants could also result in market-wide credit difficulties or other market disruptions.

We do not have counterparty credit risk with respect to institutional spot FX trades occurring on our platform because Hotspot is not a counterparty to any FX transactions. All transactions occurring on our platform occur bilaterally between two banks or prime brokers as counterparties to the trade. While Hotspot does not have direct counterparty risk, Bats Hotspot may suffer a decrease in transaction volume if a bank or prime broker experiences an event that causes other prime brokers to decrease or revoke the credit available to the prime broker experiencing the event. Therefore, Bats Hotspot may have risk that is related to the credit of the banks and prime brokers that trade FX on the Bats Hotspot Platform.

We also have credit risk related to transaction fees that are billed in arrears to customers on a monthly basis. Our potential exposure to credit losses on these transactions is represented by the receivable balances in our consolidated statements of financial condition. Our customers are financial institutions whose ability to satisfy their contractual obligations may be impacted by volatile securities markets.

On a regular basis, we review and evaluate changes in the status of our counterparties’ creditworthiness. Credit losses such as those described above could adversely affect our consolidated financial position and results of operations. Any such effects to date have been minimal.

Item 4. Controls and Procedures

a) Disclosure controls and procedures. The Company's management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report. Based upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective.

(b) Internal controls over financial reporting. On February 28, 2017, we acquired Bats. In conducting our evaluation of the effectiveness of internal controls over financial reporting, we will elect to exclude Bats when conducting our annual evaluation of internal controls as permitted by applicable regulations. The Company is implementing internal controls over significant processes specific to the acquisition that management believes are appropriate in consideration of related integration of operations, systems, control activities, and accounting for the merger and merger-related transactions. As of the date of this Quarterly Report on Form 10-Q, we are in the process of further integrating the acquired Bats operations into our overall internal controls over financial reporting. The Merger resulted in changes in the operating results for the quarter ended March 31, 2017 compared to the quarter ended March 31, 2016. Revenue less cost of revenue increased to $193.4 million, an increase

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of 35% over the three months ended March 31, 2016. Total operating expenses increased 163% to $167.3 million. As a result, net income allocated to common stockholders decreased 69% to $15.1 million.

Except as described above, no changes occurred in the Company’s internal control over financial reporting during first quarter 2017 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

For the three months ended March 31, 2017, CBOE Holdings, Inc. incorporates herein by reference the discussion set forth in Note 21 (“Commitments and Contingencies—Legal Proceedings”) of the condensed consolidated financial statements included herein.

Item 1A. Risk Factors.

The risks and uncertainties described below are those that we believe are material at this time relating to our business and relating to the Merger. These risks and uncertainties, however, are not the only risks and uncertainties that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also significantly impact us. Any of these risks and uncertainties may materially and adversely affect our business, financial condition or results of operations, liquidity, cash flows and the Merger.

The risk factors below reflect updates and additions, including risks associated with the business acquired through the Merger, and restate the risk factors set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2016.

Risks Relating to Our Business

Loss of our right to exclusively list and trade certain index options and futures could have a material adverse effect on our financial performance.

We hold exclusive licenses to list securities index options on the S&P 500 Index, the Russell 2000 Index, as well as others, granted to us by the owners of such indexes and based on which we have developed our proprietary VIX methodology. In 2016, approximately 88.2% of our transaction fees were generated by futures and index options, the overwhelming majority of which were generated by our exclusively-licensed products and products based on the VIX methodology. If the Bats acquisition had occurred on January 1, 2016, a significant portion of our 2016 transaction fees would have been generated by futures and index options, the overwhelming majority of which were generated by our exclusively-licensed products and products based on the VIX methodology. The bulk of this revenue is attributable to our S&P 500 Index options and VIX Index options and futures. As a result, our operating revenues are dependent in large part on the exclusive licenses we hold for these products and our ability to maintain our exclusive VIX methodology.

There is a risk, with respect to each of our current exclusive licenses, that the owner of the index may not renew the license with us on an exclusive basis or at all. In the first event, we would be subject to multiple listing in the trading of what is now an exclusive index product, which could result in a loss of market share and negatively impact our profitability. In the second event, we could lose the right to list the index product entirely. The loss or limited use of any of our exclusive index licenses, especially for the S&P 500 Index, for any reason could have a material adverse effect on our business and profitability.

In addition to the risks related to our exclusive licenses, if we are unable to retain exclusive proprietary rights in the VIX methodology, our volatility products could be subject to multiple listing, which could have a material adverse effect on us.

The European Union ("E.U.") has adopted legislation commonly referred to as MiFIR (as defined below) that will require the person with proprietary rights to a benchmark to provide non-discriminatory access to that benchmark to trading venues and central counterparty clearing houses for the purposes of trading and clearing. Licenses to the benchmark must be provided on fair, reasonable and non-discriminatory terms. In addition, the E.U. is considering other legislation known as the Benchmark Regulation that may impact the ability of European investors to trade our U.S. benchmark products if they are not recognized, authorized, endorsed or deemed equivalent in the E.U. While similar legislation to MiFIR has not been proposed in the U.S., if it were passed, it could cause us to lose exclusivity in our internally developed and licensed index products. The adopted and proposed European legislation may impact our expansion activities of our U.S. benchmark products in Europe, and may reduce the volume on our US options and futures exchanges from international customers.

Furthermore, our competitors may succeed in providing a market for the trading of index-based or volatility products that are economically similar to those that we offer. It is also possible that a third party may offer trading in index-based products that are the same as those that are the subject of one of our exclusive licenses, but in a jurisdiction in which the index owner cannot require a license or in a manner otherwise not covered by our exclusive license.

The value of our exclusive licenses to list securities index options also depends on the continued ability of index owners to require licenses for the trading of options based on their indexes. Although we and the index owners have prevailed

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in legal actions challenging our rights to exclusively license indexes, we may be subject to changes in the law or other actions taken in the future that might impede our ability to exclusively offer trading in certain index options.

General economic conditions and other factors beyond our control could significantly reduce demand for our products and services and harm our business.

The volume of exchange transactions and the demand for our products and services are directly affected by economic, political and market conditions in the U.S., Europe and elsewhere in the world that are beyond our control, including:


•	economic, political and geopolitical market conditions;


•	broad trends in business and finance;


•	concerns over inflation and wavering institutional or retail confidence levels;


•	government or central bank actions, such as changes in government fiscal and monetary policy and foreign currency exchange rates;


•	other legislative and regulatory changes;


•	the availability of short-term and long-term funding and capital;


•	the perceived attractiveness of the U.S. or European capital markets;


•	the availability of alternative investment opportunities;


•	changes in the level of trading activity in underlying instruments;


•	changes and volatility in the prices of securities;


•	changes in the volume of foreign currency transactions;


•	changes in supply and demand for currencies;


•	movements in currency exchange rates;


•	the level and volatility of interest rates;


•	changes in the financial strength of market participants;


•	unforeseen market closures or other disruptions in trading; and


•	disruptions due to terrorism, war, extreme weather events or other catastrophes.

Any of these factors, individually or collectively, could have a material adverse effect on our business, financial condition and operating results by causing a substantial decline in the financial services markets and reducing trading volumes and demand for market data.

We operate in a highly regulated industry and may be subject to censures, fines and other legal proceedings if we fail to comply with legal and regulatory obligations.

CBOE, C2, BZX, BYX, EDGX and EDGA are registered national securities exchanges and self-regulatory organizations (“SROs”), and, as such, are subject to comprehensive regulation by the SEC. CFE is a designated contract market (“DCM”), and Bats Hotspot SEF LLC (“Hotspot SEF”) is a swap execution facility (“SEF”), each registered with the CFTC and subject to comprehensive regulation by the CFTC. In addition to its other SRO responsibilities, BZX, as a listing market, also is responsible for evaluating applications submitted by issuers interested in listing their securities on BZX and monitoring each issuer’s compliance with BZX’s continued listing standards. Failure to comply with these SRO responsibilities could result in potential sanctions or fines and a negative impact on Bats’ reputation or branding.

Our European business is subject to regulatory oversight in the U.K. by the U.K. Financial Conduct Authority (“FCA”), which through the “passporting” regime provides authorization to carry on business in other Member States of the E.U. and the European Economic Area in accordance with the applicable E.U. legislation and regulation to which our European business is subject. If a regulatory authority makes a finding of non‑compliance, conditional fines could be imposed, and our licenses could be revoked. Any such fine or revocation of a license could have a material adverse effect on our business, financial condition and operating results.

In addition to the requirements related to operating our U.S. markets imposed by the SEC and the CFTC, we also have certain responsibilities for regulating the TPHs and members that trade on our exchanges. While we have entered into agreements under which Financial Industry Regulatory Authority (“FINRA”) with respect to our options and equities exchanges, and National Futures Association (“NFA”) with respect to our futures exchange, provide certain regulatory services, we retain ultimate responsibility for the regulation of our TPHs and members.

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Our ability to comply with applicable laws and rules is largely dependent on the establishment and maintenance of appropriate systems and procedures, our ability to attract and retain qualified personnel, the ability of FINRA and NFA to perform under the regulatory services agreements and our oversight of the work done by FINRA and NFA. The SEC and CFTC have broad powers to audit, investigate and enforce compliance and to punish noncompliance by, as applicable, SROs, DCMs and SEFs pursuant to applicable laws, rules and regulations.

If a regulatory authority were to find one of our programs of enforcement or compliance to be deficient, our exchanges could be the subject of investigations and enforcement proceedings that may result in substantial sanctions, including revocation of an exchange’s registration as a national securities exchange or DCM. Any such investigations or proceedings, whether successful or unsuccessful, could result in substantial costs, the diversion of resources, including management time, and potential harm to our reputation, which could have a material adverse effect on our business, financial condition and operating results. In addition, our exchanges may be required to modify or restructure their regulatory functions in response to any changes in the regulatory environment, or they may be required to rely on third parties to perform regulatory and oversight functions, each of which may require us to incur substantial expenses and may harm our reputation if our regulatory services are deemed inadequate. For example, if we are unable to fulfill our obligations under the consent orders with the SEC with respect to CBOE and C2 or with respect to BZX, BYX, EDGX and EDGA, it may have a significant adverse impact on our business, financial condition and operating results.

In addition, SROs such as CBOE, C2, BZX, BYX, EDGX and EDGA are required by federal law to perform a variety of regulatory functions. In light of those responsibilities, courts have held that SROs are immune from damages for some civil claims related to actions that are incident to their regulatory responsibilities. There is a risk that a court might not adopt the immunity doctrine, and whether a court that recognizes the doctrine would apply it to a claim depends on the nature of the claim. In addition, we could be exposed to liability to regulators or other governmental authorities even in situations where immunity would bar a civil claim.

Our business may be adversely affected by price competition.

The securities trading industry and foreign exchange products (“FX”) market are characterized by intense price competition, especially with respect to transaction fees. We may be required to adjust pricing to respond to actions by new or existing competitors, which could adversely impact our business, financial condition and operating results. We also compete with respect to the pricing of market data and value-added market data, such as historical market data.

In our options segment, the pricing model for trade execution has changed in response to competitive market conditions, and our competitors have adjusted transaction fees and fee structures accordingly, including by opening new exchanges, which allow them to offer multiple pricing models that can appeal to different segments of market participants. These changes have resulted in significant pricing pressures on us, especially on transaction fees and incentives for multiply-listed products. As a result of these pricing pressures, our average rate per multiply-listed options contract may decrease. It is likely that this pressure will continue and even intensify as our competitors continue to seek to increase their share of trading by further reducing their transaction fees or by offering other financial incentives to order providers and liquidity providers to induce them to direct orders to their markets.

In addition, one or more competitors may engage in aggressive pricing strategies and significantly decrease or completely eliminate their profit margin for a period of time in order to capture a greater share of trading volume. Some order-providing firms on our exchanges have taken ownership positions in options exchanges that compete with us and such exchanges have given those firms added economic incentives to direct orders to them.

With respect to our proprietary products, we compete with futures exchanges and swap execution facilities that offer similar products and other financial market participants that offer over-the-counter derivatives. We also compete on price against certain multiply-listed options products, including SPY, which offer some of the features of our proprietary products.

To attract market share, we may offer “inverted” pricing specials or no‑transaction fee trading from time to time. For example, our electronic trading platform for institutional spot FX has at times offered trading of spot gold and silver pairs without any transaction fee or waived fees for certain transactions. In addition, BZX recently began offering to pay an incentive fee to exchange‑traded investment funds that list their shares on BZX. BZX also offers a “cross‑asset add volume tier” that gives a bigger rebate for additional volume on both the BZX equities and options platforms. These forms of promotions may adversely affect our profitability.

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If we are unable to compete successfully with respect to the pricing of our services and products, our business, financial condition and operating results may be adversely affected. We could lose a substantial percentage of our share of trading if we are unable to price transactions in a competitive manner. Also, our profits could decline if competitive pressures force us to reduce fees.

A significant portion of our operating revenues is generated by our transaction-based business. If the amount of trading volume on our exchanges decreases, or the product mix shifts to lower revenue products, our revenues from transaction fees will decrease.

In 2016, approximately 70.5% of our operating revenues were generated by our transaction-based business. If the Bats acquisition had occurred on January 1, 2016, a significant portion of our 2016 operating revenues would have been generated by our transaction-based business. This business is dependent on our ability to attract and maintain order flow, both in absolute terms and relative to other market centers. If the amount of trading volume on our exchanges, CFE or notional value traded on Bats Hotspot and Bats Europe exchanges decreases, we will lose transaction fees. Revenue from our spot FX business is influenced by the general level of trading activity in the spot FX market. Trading volume on our exchanges and markets can be influenced by a number of factors, including market volatility.

Our total trading volumes could decline if our market participants reduce their trading activity for any reason, such as:


•	heightened capital requirements;


•	regulatory or legislative actions;


•	reduced access to capital required to fund trading activities; or


•	significant market disruptions.

Over the past few years, a number of legislative actions have been taken, both domestically and internationally, that may cause market participants to be subject to increased capital requirements and additional compliance burdens. These actions, including Basel III, Dodd-Frank, the Collins Amendment to Dodd-Frank, MiFID II and MiFIR (as defined below) may cause market participants to reduce the number of trades they make on our exchanges.

In addition, the transaction fees generated are different based on type of product and other factors, including the type of customer and certain volume discounts. If the amount of our trading volume decreases, or the mix traded shifts to our lower revenue per contract products, our revenues from transaction fees will decrease. We can offer no assurance that we would be able to reduce our costs to match the amount of any such decrease.

Our market data fees and revenues may be reduced due to declines in our market share, trading volumes or regulatory changes.

The occurrence of any event that reduces the amount of market data fees that we receive, whether as a result of fee reductions, fewer members subscribing to the U.S. tape plans, declines in market share or trading volumes (or notional volume in the case of Bats Europe) or regulatory changes, will have a direct negative impact on our business, financial condition and operating results. For example, if our market share of U.S. listed cash equities and options, or Bats’ European cash equities trading, were to decline, our share of market data fees could also decline. Moreover, market data fees could decline as a result of a reduction in the numbers of market data users, for example because of consolidation among market data subscribers or due to a decline in professional subscriptions as a result of staff reductions in the financial services industry or otherwise.

Regulatory and legal developments could also impact the fees we receive from market data, or our cost in providing such services. In the U.S., we are generally required to file with the SEC any changes to the fees that we charge for our securities market data products. In recent years, certain industry groups have objected to the ability of exchanges to charge for certain market data products. Specifically, the Securities Industry and Financial Markets Association (“SIFMA”) has filed a number of denial of access applications with the SEC to set aside proposed rule changes to establish or modify fees for our market data products and related services. An adverse ruling in these matters could cause the SEC to more closely examine exchange market data fees, which in turn could result in our having to reduce the fees we charge for market data and there could be a negative impact on our revenues. See Note 21 (“Commitments and Contingencies—Legal Proceedings”) for more information.

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We believe Bats Europe currently offers market data to customers on a non‑discriminatory basis at a reasonable cost. As regulators determine how market data should be disaggregated and what is a reasonable commercial basis for providing market data, it could affect our ability to offer market data products in the same manner that we do today thereby causing an adverse effect on our European market data revenues. While MiFID II and MiFIR aim to encourage a commercial solution to a consolidated tape in Europe, should this fail to materialize, policy makers might be encouraged to implement a mandatory solution that could impact our ability to develop our own commercial offering.

Legislative or regulatory changes affecting our markets could have a material adverse effect on our business, financial condition and operating results.

Changes in regulation by the SEC, CFTC, FCA, foreign regulators or other government action, including SEC approval of rule filings by other SROs or entities, including OCC, could materially affect our markets. In recent years, the securities and futures industries have been subject to regulatory changes as a result of increasing government and public scrutiny of the securities and futures industries. We have also experienced an increase in rulemaking and legislation that could affect our business.

In 2010, Congress passed the Dodd-Frank Act and other legislation. While many of its requirements have been implemented or are in the process of being implemented, some of the provisions in Dodd-Frank that impact our markets require additional action by the SEC or the CFTC. Depending on how the SEC and CFTC interpret, implement or alter these laws, exchanges like ours could be subject to additional costs. We could also see reduced trading by our customers due to margin or other requirements placed on them.

Under the Collins Amendment to the Dodd-Frank Act, starting in 2015, large U.S. banks were required to use a new approach to compute their risk weighted assets, which include exchange-traded options and futures. This, and other rulemaking, has led to further increases in capital requirements for U.S. bank holding companies, and bank subsidiaries involved in the trading and clearing of derivatives. These increased capital requirements may reduce trading in options and futures due to bank-affiliated clearing members and broker-dealers reducing their own trading, charging their customers more to trade, reducing the type or number of customers or withdrawing from the business of market-maker clearing.

In 2016, the SEC approved a plan to create, implement and maintain a consolidated audit trail, which would serve as a comprehensive audit trail of orders that will allow regulators to efficiently and accurately track all activity in Regulation NMS securities in the U.S. market. In addition to increased regulatory obligations, implementation of a consolidated audit trail could result in significant additional expenditures, including to implement any new technology to meet any plan’s requirements.

In addition, the SEC approved a two‑year “tick pilot” program to impose wider minimum quoting and/or trading increments, or tick sizes, in certain securities in an effort to incentivize liquidity provision in those securities. The tick pilot began on October 3, 2016 and consists of a control group of approximately 1,400 securities. The exchanges, including BZX, BYX, EDGX and EDGA, and FINRA are required to submit their initial assessments on the tick pilot’s impact 18 months after the pilot begins based on data generated during the first 12 months of its operation. The tick pilot requires BZX, BYX, EDGX and EDGA to devote significant additional resources to implement and report on the program, increasing our costs. In addition, for tick pilot test group securities where execution at price increments narrower than the permitted quote is permitted, the implementation of the tick pilot could incentivize additional trading away from the exchanges, reducing the volume of orders executed on BZX, BYX, EDGX and EDGA.

Further, Congress, regulators and some media have been increasingly scrutinizing electronic trading, the structure of equity markets and high frequency trading in recent years. The SEC continues to consider various potential market structure changes, which could result in reduced trading volumes, or which could negatively affect our business. To the extent the SEC adopts regulatory changes, our business, financial condition and operating results could be negatively impacted. In addition, the continued growth of high frequency trading has been the subject of private litigation and regulatory enforcement actions alleging that high frequency trading firms have received unfair advantages at the expense of other traders. High frequency trading accounts for a meaningful percentage of the daily volume in the U.S. and European equity markets, and these actions and other efforts to slow trading could lead to a reduction in trading volumes, negatively impacting all trading markets, including our business.

Under E.U. regulations, European banks and other European financial institutions become subject to punitive capital charges if they transact options or futures through a non-qualifying clearinghouse. OCC, our clearinghouse for options and futures, is not currently recognized as a qualified clearinghouse by the E.U. The current deadline for the E.U. to qualify foreign clearinghouses as equivalent is June 15, 2017. If the E.U. does not recognize OCC as a qualified clearinghouse by such date (or by a subsequent date in the event that the current deadline is extended), then European market participants that clear through

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OCC would become subject to punitive capital charges. As a result, we could experience the loss of a significant number of European market participants and a significant reduction in trading activity on our options and futures markets, which could have a material adverse effect on our business, financial condition and operating results.

The Markets in Financial Instruments Directive (Directive 2004/39/EC) (“MiFID”), came into effect in 2007, regulating the market for execution services within European listed cash equity securities. MiFID will be superseded and enhanced by the Directive on Markets in Financial Instruments (Directive 2014/65/EU) repealing Directive 2004/39/EC and the Regulation on Markets in Financial Instruments (Regulation (EU) No 600/2014), commonly referred to as “MiFID II and MiFIR,” respectively, which are expected to be implemented at the beginning of 2018. The implementation of MiFID II and MiFIR in Europe will result in an alteration of the existing MiFID structure that has encouraged competition among market centers in Europe. The impact of MiFID II and MiFIR is likely to be significant, and could reduce trading volumes and trading fees, while increasing our costs of operating in Europe. Despite the U.K.’s vote to leave the E.U., it is expected that MiFID II and MiFIR will be implemented in the U.K. ahead of any exit.

For example, MiFID II and MiFIR introduce a number of new rules which apply directly to European trading venues such as our MTF and RM. These rules include provisions governing high frequency algorithmic trading and specific obligations on firms operating RMs and MTFs to put in place systems, procedures and arrangements to ensure the trading venue is resilient, has sufficient capacity to cope with order flow, has effective business continuity arrangements, etc. In particular, there are new rules specifically governing tick sizes, synchronization of business clocks and the imposition of limits on the ratio of orders to transactions which RMs and MTFs will need to implement. In addition, MiFID II and MiFIR introduce enhanced internal organizational and compliance monitoring requirements for RMs and MTFs which will require us to enhance our internal compliance arrangements, processes and procedures. MiFIR may also have an adverse impact on our U.S. listed cash equity operations as a result of the introduction of a mandatory equity trading rule which would require E.U. investment firms to trade equities which are either admitted to trading on an RM or traded on an E.U. trading venue only on RMs, MTFs, with systematic internalisers or with third country trading venues which have been specifically assessed to be equivalent. Since a significant number of U.S. listed cash equities can be traded on E.U. trading venues, E.U. investment firms may be required to undertake trades in such U.S. listed cash equities only on those European markets unless and until an equivalence assessment is made in respect of our U.S. exchanges.

MiFIR also introduces a much broader transparency regime for RMs and MTFs covering not only pre‑ and post‑trade transparency for equities but also for equity‑like instruments, derivatives (including certain currency products) and fixed income instruments.

The legislative and regulatory environment in which the spot FX market operates is evolving and has undergone significant changes in the recent past, and there may be future regulatory changes in the spot FX industry. Spot FX market participants have seen an increasing number of law enforcement actions and regulatory inquiries into their business practices. The governmental bodies and regulatory organizations that regulate parts of the spot FX market have enacted, proposed and may consider additional legislative and regulatory initiatives and may adopt new or revised laws and regulations. Changes in the interpretation or enforcement of existing laws and regulations by these entities, or the adoption of new legal or regulatory requirements, may also adversely affect our spot FX business.

In addition, a global central bank and industry group initiative, instigated by the Bank of International Settlements, has sought to develop a single set of global principles of good practice for the wholesale FX market. This global code of conduct (the “Global Code”) is being developed to provide a common set of guidelines to promote the integrity and effective functioning of the FX market. Although the Global Code does not impose legislative or regulatory obligations on market participants, following its publication in May 2017 our spot FX business may be subject to commercial pressures to accommodate its clients’ demands in terms of Global Code adherence, as well as demands to demonstrate our own compliance with the principles set forth therein.

It is also possible that there will be additional legislative and regulatory changes or efforts in the environment in which we operate our businesses, although we cannot predict the nature of these changes or their impact on our business at this time. Actions on any of the specific regulatory issues currently under review in the U.S. or Europe and other proposals could have a material impact on our business.

In addition, U.S. and foreign legislatures and regulators and other regulatory authorities could impose legislative or regulatory changes that could adversely impact the ability of our market participants to use our markets, or participate in the securities industry at all. Any such changes could result in the loss of a significant number of market participants or a reduction in trading activity on our markets, either of which could have a material adverse effect on our business, financial condition and

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operating results. Changes or proposed changes in regulation may also result in additional costs of compliance and modification of market participants’ trading activity on our exchanges and markets.

The Brexit Vote could have a negative impact on the U.K. and E.U. economies and lead to considerable uncertainty while new treaties are negotiated.

On June 23, 2016, the U.K. voted to leave the E.U. in a referendum (the “Brexit Vote”). On March 28, 2017, the U.K. invoked Article 50 with its notice to leave the E.U. The terms and the exact timing of the U.K.’s exit from the E.U. (“Brexit”) remain unclear, although it is unlikely to be completed before the end of March 2019. In addition to the economic uncertainty the Brexit Vote brings, there are a number of potential risks that investors should consider:

•

Political uncertainty . Following the Brexit Vote, the U.K. has entered into a period of acute political uncertainty both as to the nature and timing of the negotiations with the E.U. A general election has also been called for June 8, 2017. Such uncertainty could lead to a high degree of economic and market disruption and legal uncertainty. It is not possible to ascertain how long this period will last and the impact it will have on the U.K. in general and markets more broadly.

•

Legal uncertainty . A significant proportion of English law currently derives from or is designed to operate in concert with E.U. law. This is especially true of English law relating to financial markets, financial services, prudential and conduct regulation of financial institutions, bank recovery and resolution, payment services and systems, settlement finality, and market infrastructure. Depending on the timing and terms of the U.K.’s exit from the E.U., significant changes to English law are likely, and we cannot predict what these changes will be and how they may affect our business.

•

Regulatory uncertainty . There is significant uncertainty about how the remaining E.U. (“EU27”) financial institutions with assets (including branches) in the U.K. and U.K. financial institutions with assets in the EU27 will be regulated. At present, E.U. single market regulation allows regulated financial institutions (including credit institutions, investment firms, alternative investment fund managers, insurance and reinsurance undertakings) to benefit from a passporting system for regulatory authorizations required to conduct their businesses, as well as facilitating mutual rights of access to important elements of market infrastructure such as payment and settlement systems. E.U. law is also the framework for mutual recognition of bank recovery and resolution regimes.

Once the U.K. ceases to be a member state of the E.U., the current passporting arrangements are expected to cease to be effective, as will the current mutual rights of access to market infrastructure and current arrangements for mutual recognition of bank recovery and resolution regimes. The ability of regulated financial institutions to continue to do business between the U.K. and the EU27 after the U.K. ceases to be a member state of the E.U. would therefore be subject to separate arrangements between the U.K. and the EU27. There can be no assurance that there will be any such arrangements concluded and, if they are concluded, on what terms.

•

Market uncertainty . Since the Brexit Vote, there has been volatility and disruption of the capital, currency and credit markets. If this disruption continues, it may adversely impact our business, financial condition and operating results. In 2016, Bats derived 5.7% of its total revenues from its U.K. operations. Depending on the outcome of the Brexit negotiations, companies with operations in the U.K. may face unfavorable business conditions to access the single market. In such a case, Bats Europe may choose to move some or all of its operations to the E.U. and the related costs and expenses could have a material adverse effect on our business, financial condition and operating results.

Intense competition could materially adversely affect our market share and financial performance.

The market for trade execution services and products is intensely competitive in the asset classes and geographies in which we operate. Increased competition may result in a decline in our share of trading activity and a decline in our revenues from transaction fees and market data fees, thereby adversely affecting our operating results. We compete with a number of entities on several different fronts, including the cost, quality and speed of our trade execution, functionality and ease of use of our trading platform, range of our products and services, our technological innovation and adaptation and our reputation. We compete with futures exchanges and swap execution facilities that offer comparable products and with the over-the-counter market with respect to our proprietary products. With respect to our multiply-listed products, our principal competitors are the eleven other U.S. options exchanges as of March 31, 2017. See the risk factor entitled "Our business may be adversely affected by price competition."

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Most of the equity options and options on exchange-traded products listed and traded on our exchanges are also listed and traded on other options exchanges. Changes we have implemented in response to competitive pressures may not be successful in maintaining or expanding our market share in those products in the future. Likewise, our future responses to these or other competitive developments may not be successful in maintaining or expanding our market share.

Our U.S. listed cash equity securities compete against national exchanges, regional exchanges and several alternative trading systems (“ATSs”). Market participants have multiple venues for the execution of orders, including national securities exchanges as well as numerous off‑exchange venues, including ATSs operating “dark pools” that do not publicly display quotations, “lit” ATSs that publicly display quotations operating as electronic communication networks, and broker‑dealers who internalize orders off‑exchange. If off-exchange trading expands further, it will adversely affect our market share in the U.S. In addition, newer market entrants with different models may seek status as national securities exchanges, further competing with our exchange business.

The market for execution services within European listed cash equity securities has become significantly more competitive since MiFID and MiFID II and MiFIR. MiFID created a structure for pan-European competition versus other exchange monopolies throughout the E.U. countries. As a result, new MTFs emerged that have captured significant market share from existing national exchanges. Our major competitors in Europe include 12 other equities exchanges as of March 31, 2017.

The spot FX market remains severely fragmented, with transparent automated marketplaces such as Bats Hotspot, challenging two primary competitors. The electronic spot FX market is also intensely competitive, with over ten other venues competing for market share as of March 31, 2017. Additionally, exchange operators are actively expanding into the global spot FX market.

In addition, indexes underlying our products, including the VIX Index and SPX, may be licensed for use in similar competing OTC options. Needs or preferences of investors could change leading to a migration to the OTC market of some trades that today could be entered into on our exchanges. Options on ETFs and ETNs that have such licenses on these indexes are available for trading. As a result, trading in our options and futures products could decrease due to competitive pressures from these alternative products.

Some of our competitors and potential competitors have greater financial, marketing, technological, personnel and other resources than we do. These factors may enable them to develop similar or more innovative products, to offer lower transaction fees or better execution to their customers or to execute their business strategies more quickly or efficiently than we can. In addition, our business, financial condition and operating results may be adversely affected if we cannot successfully develop, introduce and/or market new services and products or if we need to adopt costly and customized technology for our services and products.

Furthermore, new or existing competitors may:


•	respond more quickly to competitive pressures;


•	develop products that compete with our products or are preferred by our customers;


•	offer products and services at prices below ours to gain market share and to promote other businesses;


•	develop and expand their technology and service offerings more efficiently;


•	provide better, more user-friendly and more reliable technology;


•	take greater advantage of acquisitions, alliances and other opportunities;


•	market, promote, bundle and sell their products and services more effectively;


•	leverage existing relationships with customers and alliance partners more effectively or exploit brand names to market and sell their services; and


•	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.

If our products, markets, services and technology are not competitive or we fail to anticipate or respond adequately to changes in technology, customer preferences and regulatory requirements or any significant delays in product development efforts our business, financial condition and operating results could be materially harmed.

Further consolidation and alliances among our competitors could impair our competitive position.

In recent years, the securities trading industry has witnessed increased consolidation among market participants, such as Bats’ acquisition of Direct Edge Holdings LLC in January 2014 and our own acquisition of Bats in February 2017.

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Additional consolidations and alliances among market participants may create larger internal liquidity pools that may attract trading volume and liquidity away from our exchanges and, therefore, lead to decreased revenues. In addition, consolidations or alliances among our current competitors may achieve cost reductions or other increases in efficiency, which may allow our competitors to offer lower prices or better customer service than we do. These post‑merger competitors may be able to achieve efficiencies that allow them to offer lower transaction fees or other financial incentives, which may hinder our ability to stay competitive in listed cash equity securities, options, futures and spot FX. In addition, these mergers may result in stronger competitors than the premerger entities as stand‑alone businesses in other markets that we may decide to enter.

We depend on third-party service providers for certain services that are important to our business. An interruption or cessation of such service by any third party could have a material adverse effect on our business, financial condition and operating results.

We depend on a number of service providers, including clearing organizations such as OCC, the National Securities Clearing Corporation (“NSCC”), LCH.Clearnet Group Limited (“LCH”), EuroCCP N.V., a Dutch domiciled clearing house (“EuroCCP”) and SIX x‑clear Ltd (“SIX x-clear”); securities information processors such as the Consolidated Tape Association (“CTA”), UTP Securities Information Processor and OPRA; regulatory service providers such as FINRA and NFA; the hosts of our data and disaster recovery centers; and various vendors of communications and networking products and services. In addition, Bats Trading depends on routing and clearing firms who are involved in processing transactions on our behalf, including Wedbush Securities Inc. (“Wedbush”), Merrill Lynch, Pierce, Fenner & Smith Incorporated (“BofA Merrill Lynch”) and Morgan Stanley & Co. LLC (“Morgan Stanley”). More specifically:

•

OCC is the sole provider of clearing on all of our options and futures exchanges. NSCC is a provider of clearing on our U.S. listed cash equity exchanges. Bats Europe relies on EuroCCP, LCH and SIX x-clear to clear trades in European listed equity securities as part of an interoperable clearing model. If they were unable to perform clearing services, or their clearing members were unable or unwilling to clear through them, transactions could likely not occur on our markets or there may be delays.


•	OPRA, UTP Securities Information Processor and the CTA consolidate options and equities 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 and equities markets.


•	We are heavily dependent on technology for our markets, including our data and disaster recovery centers, including those housed by third parties, 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.


•	FINRA and NFA provide certain regulatory services and functions for our options, equities and futures exchanges, 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.


•	We rely on Wedbush and Morgan Stanley to clear trades in U.S. listed cash equity securities routed by us to other markets, and we rely on BofA Merrill Lynch, Wedbush, Wolverine Execution Services, L.L.C. (“WEX”) and Compass Professional Services, L.L.C. (“Compass”) to execute trades in options that we route to other markets.

With respect to options, all contracts traded on our exchanges must be cleared through clearing members of OCC. At March 31, 2017, there were one hundred one TPHs that are clearing members of OCC. Two clearing members accounted for approximately 40% of transaction and other fees collected through OCC in 2017. The next largest clearing member accounted for approximately 15% of transaction and other fees collected through OCC. Additionally, the two largest clearing members clear the majority of the market-maker sides of transactions at CBOE, C2 and at all of the options exchanges. Should a clearing member or liquidity provider withdraw from our options exchanges and market-makers were unable to transfer to another clearing member or other liquidity providers were unable to provide additional liquidity, this could create a significant disruption to the options markets, including ours.

We cannot provide assurance that any of these providers will be able to continue to provide these services in an efficient manner or that they will be able to adequately expand their services to meet our needs. An interruption or malfunction in or the cessation of an important service by a third party could cause us to halt trading in some or all of our products or our services, or make us unable to conduct other aspects of our business. In addition, our inability to make alternative arrangements in a timely manner, or at all, could have a material adverse impact on our business, financial condition and operating results.

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If one or more of the index providers from which we have licenses or service providers with respect to proprietary products fails to maintain the quality and integrity of their indexes or fails to perform under our agreements with them or if customer preferences change, revenues we generate from trading in these proprietary products may suffer.

We are a party to an increasing number of license agreements pursuant to which we may list for trading securities options on various indexes including license agreements that we have with S&P, for the S&P 500 Index and S&P 100 Index, S&P Dow Jones Indices, LLC, for the Dow Jones Industrial Average, LSEG, for more than two dozen FTSE Russell indexes, including the Russell 2000 Index, and MSCI Inc., for six MSCI indexes, including the MSCI EAFE Index and MSCI Emerging Markets Index. These license agreements provide that we are authorized to list options on their indexes, and some of the resulting index options are among the most actively traded products on our exchanges. The quality and integrity of each of these indexes are dependent on the ability of the index providers to maintain the index, including by means of the calculation and rebalancing of the index, and we are dependent on the index providers for a number of things, including the provision of index data to us. We also rely on index providers to enforce intellectual property rights against unlicensed uses of the indexes and uses of the indexes that infringe on our licenses. Furthermore, some of our agreements concerning our proprietary products provide for the parties to those agreements to provide important services to us. If any of our index providers are unable to maintain the quality and integrity of their indexes, or if any of the index providers or service providers fail to perform their obligations under the agreements, trading in these products, and therefore transaction fees we receive, may be adversely affected or we may not receive the financial benefits of the agreements that we negotiated.

We and our licensors may not be able to protect our respective intellectual property rights.

We rely on patent, trade secret, copyright and trademark laws, the law of the doctrine of misappropriation and contractual protections to protect our proprietary technology, proprietary products, index methodologies and other proprietary rights. In addition, we rely on the intellectual property rights of our licensors in connection with our listing of exclusively-licensed index and futures products. We and our licensors may not be able to prevent third parties from copying, or otherwise obtaining and using, our intellectual property without authorization, listing our proprietary or exclusively-licensed index products without licenses or otherwise infringing on our rights. We and our licensors may have to rely on litigation to enforce our intellectual property rights, determine the validity and scope of the proprietary rights of others or defend against claims of infringement or invalidity. We and our licensors may not be successful in this regard. Such litigation, whether successful or unsuccessful, could result in substantial costs to us, diversion of our resources or a reduction in our revenues, any of which could materially adversely affect our business.

Any infringement by us on intellectual property rights of others could result in litigation and could have a material adverse effect on our operations.

Our competitors, as well as others, have obtained, or may obtain, patents or may otherwise may hold intellectual property rights that are related to our technology or the types of products and services we offer or plan to offer. We may not be aware of all intellectual property that may pose a risk of infringement by our products, services or technologies. In addition, some patent applications in the U.S. are confidential until a patent is issued, and therefore we cannot evaluate the extent to which our products and services may be covered or asserted to be covered in pending patent applications. Thus, we cannot be sure that our products and services do not infringe on the rights of others or that others will not make claims of infringement against us. Claims of infringement are not uncommon in our industry, and even if we believe that such claims are without merit, they can be time-consuming and costly to defend and divert management resources and attention. If one or more of our products, services or technologies were determined to infringe a patent or other intellectual property right held by another party, we may be required to pay damages, stop using, developing or marketing those products, services or technologies, obtain a license from the holders of the patents or redesign those products, services or technologies to avoid infringing the patent. If we were required to stop using, developing or marketing certain products, our business, financial condition and operating results could be materially harmed. Moreover, if we were unable to obtain required licenses, we may not be able to redesign our products, services or technologies to avoid infringement, which could materially adversely affect our business, financial condition and operating results.

If we fail to attract or retain highly skilled management and other employees, including those experienced with integration of our business, our business may be harmed.

Our success largely depends on the skills, experience and continued efforts of management and other key personnel. As a result, to be successful, we must retain and motivate executives and other key employees. We expect to benefit from the integration experience of certain employees who were formerly Bats personnel. However, we have no assurances that these employees will remain with us. The roles and responsibilities of departing executive officers and employees will need to be filled either by existing or new officers and employees, which may require us to devote time and resources to identifying, hiring

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and integrating replacements for the departed executives and employees that could otherwise be used to advance integration or otherwise pursue business opportunities, which could have a material adverse effect on our overall business, financial condition and operating results.

Additionally, certain of our information technology employees will be important to retain during the migration period to effectively manage our technology platforms and to assist in the process of migrating our systems to the Bats’ technology platform. Many of these employees have extensive knowledge and experience in highly technical and complex aspects of CBOE’s technology platform. Because of the complexity and risks associated with our business and the specialized knowledge required to conduct this business effectively, and because the growth in our industry has increased demand for qualified personnel, many of our employees could find employment at other companies if they chose to do so, particularly if we fail to continue to provide competitive levels of compensation. Also, our employees may experience uncertainty about their future roles until integration strategies following the Merger are executed. These circumstances may adversely affect our ability to retain key personnel. We also must continue to motivate employees and maintain their focus on our strategies and goals. Doing so may be difficult due to the uncertainty and challenges associated with post-merger integration. In addition, if these personnel were to leave or we are unable to recruit highly qualified personnel, we may experience increased difficulty in the integration process, synergy realization, maintenance of the current technology platform and may not be able to adequately replace such personnel, which could have a material adverse effect on our overall business, results of operations and financial condition.

There is substantial competition for qualified and capable personnel in the technology space, which may make it difficult for us to retain and recruit qualified employees in sufficient numbers. If we fail to retain our current employees, it would be difficult and costly to identify, recruit and train replacements needed to continue to conduct and expand our business. In particular, failure to retain and attract qualified systems personnel could result in systems failures. Consequently, our reputation may be harmed, we may incur additional costs and our profitability could decline. There can be no assurance that we will be able to retain and motivate our employees in the same manner as we have historically done.

Additionally, effective succession planning is also important to our long-term success. Failure to ensure effective transfer of knowledge and smooth transitions involving our management team and key employees could hinder our strategic planning and execution.

Computer and communications systems failures and capacity constraints could harm our reputation and our business.

Our business depends on the integrity and performance of our computer and communications systems. If our systems cannot expand to cope with increased demand or otherwise fail to perform, including during migrations from the CBOE Command platform to the Bats technology platform, we could experience unanticipated disruptions in service, slower response times and delays in the introduction of new products and services. These consequences could result in trading outages, lower trading volumes, financial losses, decreased customer service and satisfaction and regulatory sanctions and could have a material adverse effect on our ability to conduct our business. Although we have a back-up of trading and key corporate systems, the back-up systems or disaster recovery plans may prove to be inadequate in the event of a systems failure or cyber-security breach. Despite having disaster recovery facilities, there can be no guarantees that we will be able to open an efficient, transparent and liquid marketplace, if we can open at all, following a systems failure. Moreover, with extended trading hours, we have to operate our systems longer and have fewer non-trading hours to address any potential concerns with the systems on which we rely.

We expect to migrate CBOE, C2 and CFE from the CBOE Command platform to the legacy Bats technology platform. Bats’ markets have experienced occasional systems failures and delays in the past, and we could experience future systems failures and delays. For example, serious technical failures forced Bats to cancel its initial public offering and played a role in the halting of another issuer’s stock for five minutes. Bats has since remedied the failures, but there can be no guarantee that we will not suffer a similar technological failure in the future that damages our reputation and results in increased regulatory scrutiny by the SEC and other governmental authorities.

More specifically, our systems may fail, in whole or in part, or may operate slowly, causing, including, one or more of the following:


•	unanticipated disruption in service to our participants;


•	failures or delays during peak trading times or times of unusual market volatility;


•	slower response times and delays in trade execution and processing;


•	incomplete or inaccurate accounting, recording or processing of trades; and


•	distribution of inaccurate or untimely market data to participants who rely on this data in their trading activity.

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Any of these events may cause:


•	a loss in transaction or other fees due to the inability to provide services for a time;


•	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;


•	trading to diminish on our exchanges due to dissatisfaction with the platform; and


•	one or more of our regulators to investigate or take enforcement action against us.

As a consequence of any of these events, our business, financial condition and results of operations could suffer materially.

In addition to other measures, we test our systems to confirm whether they will be able to handle anticipated present and future peak trading activity or times of unusual market volatility. However, we cannot assure you that our estimates of future trading volume will be accurate or that our systems will always be able to accommodate actual trading volume without failure or degradation of performance.

We anticipate that we will need to continue to make significant investments in hardware, software and telecommunications infrastructure to accommodate the increases in traffic. If we cannot increase the capacity and capabilities of our systems to accommodate increasing trading activity and to execute our business strategy, our ability to maintain or expand our businesses would be adversely affected.

The computer systems and communication networks upon which we rely may be vulnerable to security risks or unauthorized disclosure of confidential information and other disruptions that could harm our business.

The secure and reliable operation of our computer systems, our communications networks and the systems of our service providers and market participants is a critical element of our operations. These systems and communications networks may be vulnerable to unauthorized access, including the improper access or disclosure of confidential or personally identifiable information, malware and other security problems, as well as to acts of terrorism, natural disasters, human error, power loss and other events that are beyond our control. Our treatment of confidential information may also be subject to contractual restrictions. Although we currently maintain and expect to maintain security measures designed to protect the integrity of our systems and to protect against unauthorized access, such security measures, systems and facilities may prove inadequate. If our security measures are inadequate or if there are interruptions or malfunctions in our systems or communications networks, we may be subject to contractual liability and damages, loss of business, penalties, unfavorable publicity and our financial condition and operating results could be materially impacted. We may be required to expend significant resources in the event of any real or threatened breaches in security or system failures, including to protect against threatened breaches and to alleviate harm caused by an actual breach, and may suffer harm to our reputation and litigation. Measures we implement for security and otherwise to provide for the confidentiality, integrity and reliability of our systems may prove to be inadequate in preventing system failures or delays in our systems or communications networks, which could lower trading volume and have an adverse effect on our business, financial condition and operating results.

Our use of open source software code may subject our software to general release or require us to re ‑ engineer our software, which could harm our business.

The Bats technology platform uses open source software code. Companies that incorporate open source software into their products have, from time to time, faced claims challenging the ownership of open source software. As a result, we could be subject to suits by parties claiming ownership of what we believe to be open source software. In addition, some open source software licenses require users who distribute open source software as part of their software to publicly disclose all or part of the source code in their software and make any derivative works of the open source code available on unfavorable terms or at no cost. Open source license terms may be ambiguous, and many of the risks associated with usage of open source software cannot be eliminated. We believe that our use of open source software is in compliance with the relevant open source software licenses and does not require disclosure of any of our source code. However, if we were found to have inappropriately used open source software, we may be required to release our proprietary source code, re‑engineer or discontinue use of our software or take other remedial action.

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Potential conflicts of interest between our for-profit status and our regulatory responsibilities may adversely affect our business.

As a for-profit business with regulatory responsibilities, we are responsible for disciplining TPHs and members for violating our rules, including by imposing fines and sanctions. This may create a conflict of interest between our business interests and our regulatory responsibilities. Any failure by us to fulfill our regulatory obligations could significantly harm our reputation, increase regulatory scrutiny or cause the SEC or CFTC to take action against us, all of which could adversely affect our business, results of operations or financial condition.

Damage to our reputation could have a material adverse effect on our business, financial condition and operating results.

We believe one of our competitive strengths is our strong industry reputation. Various issues may give rise to reputational risk, including issues relating to:


•	the representation of our business in the media;


•	the quality and benefits of using our proprietary products, including the reliability and functionality of our transaction‑based business, and the accuracy of our market data;


•	the ability to execute our business plan, key initiatives or new business ventures and the ability to keep up with changing customer demands and regulatory initiatives;


•	our regulatory compliance and our enforcement of compliance on our customers;


•	the accuracy of our financial statements and other financial and statistical information;


•	the quality of our corporate governance structure;


•	the quality of our disclosure controls and internal controls over financial reporting, including any failures in supervision;


•	the integrity and performance of our computer and communications systems;


•	security breaches, including any unauthorized delivery of proprietary data to third parties;


•	management of our outsourcing relationships, including our relationship with FINRA and NFA;


•	any misconduct or fraudulent activity by our employees, especially senior management, or other persons formerly or currently associated with us;


•	our listings business and our enforcement of our listing rules; and


•	any negative publicity surrounding our listed companies.

Damage to our reputation could cause a reduction in the trading volume on our exchanges or cause us to lose customers. This, in turn, may have a material adverse effect on our business, financial condition and operating results.

If our risk management and compliance methods are not effective, our business, financial condition and operating results may be adversely affected.

Our ability to comply with all applicable laws and rules is largely dependent on our establishment and maintenance of compliance, audit, risk and reporting systems and procedures, as well as our ability to attract and retain qualified compliance, audit and risk management personnel. These systems and procedures may not be fully effective. We face the risk of intervention by regulatory authorities, including extensive examination and surveillance activity. In the case of actual or alleged non‑compliance with applicable laws or regulations, we could be subject to investigations and judicial or administrative proceedings that may result in substantial penalties, settlements or civil lawsuits, including by customers, for damages, which may be substantial. In the past, the SEC has brought actions against exchange operators, including us, for failing to fulfill their obligations to have an effective regulatory system. Any failure to comply with applicable laws and rules could adversely affect our business, reputation, financial condition and operating results and, in extreme cases, our ability to conduct our business or portions thereof. As the parent company for SROs, we are responsible for maintaining exchanges that comply with securities and futures laws, SEC and CFTC regulations and the rules of the respective exchanges.

We have methods to identify, monitor and manage our risks. Management of legal and regulatory risk requires policies and procedures to properly monitor, record and verify a large number of transactions and events. If our policies, procedures, and compliance systems are not effective or we are not successful in monitoring or evaluating the risks to which we are or may be exposed, our business, reputation, financial condition and operating results could be materially adversely affected. We cannot provide assurance that our policies and procedures will always be effective, or that our compliance, enterprise risk management and internal audit functions would be able to identify any such ineffectiveness. If these functions, policies and procedures are not effective, we may be subject to monetary or other penalties by our regulators, and our insurance policies may not provide adequate coverage.

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Misconduct by our Trading Permit Holders (TPHs), members or others could harm us.

We run the risk that our TPHs, members or other persons who use our markets or our employees may engage in fraud, market manipulation or other misconduct, which could result in regulatory sanctions and serious harm to our reputation, especially because we are the parent company of SROs. It is not always possible to deter misconduct or market manipulation, and the precautions we take to prevent and detect this activity may not be effective in all cases. In addition, misconduct or market manipulation by, or failures of, participants on our exchanges may discourage trading on our exchanges, which could reduce revenues.

Financial or other problems experienced by third parties could have an adverse effect on our business.

We are exposed to credit risk from third parties, including customers, clearing agents and counterparties. For example, we are exposed to credit risk for transaction fees we bill to customers on a monthly basis in arrears. Our customers and other third parties may default on their obligations to us due to a lack of liquidity, operational failure, bankruptcy or other reasons.

In addition, with respect to orders Bats Trading routes to other markets for execution on behalf of our customers, Bats Trading is exposed to counterparty credit risk in the case of failure to perform on the part of our routing and clearing firms who are involved in processing transactions on our behalf, including Wedbush, BofA Merrill Lynch and Morgan Stanley, as well as failure on the part of such brokers to pass back any transactional rebates. Wedbush, BofA Merrill Lynch and Morgan Stanley guarantee trades until one day after the trade date, after which time NSCC provides a guarantee. Thus, Bats Trading is potentially exposed to credit risk to the counterparty to a trade routed to another market center between the trade date and one day after the trade date in the event that Wedbush, BofA Merrill Lynch or Morgan Stanley fails to perform.

With respect to U.S. equities, Bats Trading has counterparty credit risk exposure to Wedbush and Morgan Stanley related to clearing until the day following the trade date. Bats Trading uses Wedbush to clear trades routed through affiliates of Credit Suisse Securities (USA) LLC as well as for trades routed directly to other exchanges and optionally dark pools. Morgan Stanley clears trades routed through the Morgan Stanley routing brokers and also clears executions routed to most dark pools. Bats Trading maintains counterparty credit risk exposure from routing brokers with respect to rebates earned until completion of the routing brokers next invoice cycle following the execution.

With respect to U.S. listed equity and exchange traded product options, Bats Trading is subject to counterparty credit risk exposure from Wedbush and BofA Merrill Lynch related to clearing until the day following the trade date. For U.S. listed equity options, Bats Trading uses Wedbush to clear trades routed through affiliates of Lime Brokerage Holdings LLC as well as trades sent directly to another exchange. BofA Merrill Lynch clears trades routed through its own routing broker. We also use WEX and Compass to execute trades in options that we route to other markets. Counterparty credit risk also exists with respect to rebates earned from routing brokers until completion of the routing brokers’ next invoice cycle has completed for an execution.

Our exposure to credit risk may be further impacted by volatile securities markets that may affect the ability of our customers and other third parties to satisfy their contractual obligations to us. Moreover, we may not be successful in managing our credit risk through reporting and control procedures or by maintaining credit standards. Any losses arising from such defaults or other credit losses could adversely affect our financial condition and operating results.

While Bats Hotspot does not have direct counterparty risk, Bats Hotspot may suffer a decrease in transaction volume if a bank or prime broker experiences an event that causes other prime brokers to decrease or revoke the credit available to the prime broker experiencing the event. Therefore, Bats Hotspot may have risk that is related to the credit of the banks and prime brokers that trade spot FX on the Bats Hotspot platform.

We may be required to assume ownership of a position in securities in connection with our order routing service, which could subject us to trading losses when our broker-dealer disposes of that position.

We offer a smart‑order routing service through our broker‑dealer subsidiary, Bats Trading, which provides its customers with access to other market centers when we route their orders to those market centers for execution. In connection with this service, we may assume ownership of a position in securities. This may occur, for example, when a market center to which we have routed a customer’s order experiences systems problems and is unable to determine the status of that order. When this happens, we may make a business decision to provide a cancellation notice to our customer, relieving our customer of any liability with respect to the order. We may be informed later, however, that the order was executed at the market center to which we routed it, in which case Bats Trading would be required to take ownership of that securities position. Our clearing brokers, Wedbush, BofA Merrill Lynch and Morgan Stanley, maintain error accounts on behalf of Bats Trading into which such

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positions settle, and we require the respective clearing broker to trade out of those positions as expeditiously as possible, which could result in our incurring trading losses.

We may not effectively manage our growth, which could materially harm our business, financial condition and operating results.

From 2011 to 2016, we have experienced significantly increased volume on our futures exchange, extended trading hours on our futures exchange and in SPX and VIX options and developed several proprietary products. We also experienced a substantial expansion of our business following our acquisition of Bats, which significantly expanded our product line across asset classes, broadened our geographic reach with strong pan-European equities and global FX positions and diversified our business mix with significant non-transactional revenue streams. Bats has also experienced significant growth in its business since its inception in 2005, with material expansions into diverse businesses including European listed cash equity securities, U.S. listed equity options and global institutional spot FX trading. In addition, in 2016, we made a majority equity investment in CBOE Vest, an investment manager focused on Target Outcome Investment strategies, and made a minority equity investment Eris, a U.S.-based futures exchange group offering swap futures as a capital-efficient alternative to over-the-counter swaps.

We expect that our business will continue to grow, which may place a significant strain on our management, personnel, systems and resources. We must continually improve our operational, financial and regulatory systems and managerial controls and procedures, and may need to continue to expand, train and manage our workforce. We must also maintain close coordination among our technology, legal, accounting, finance, marketing, sales, regulatory and compliance functions. We cannot assure you that we will manage our growth effectively. If we fail to do so, our business, financial condition and operating results could be materially harmed. Furthermore, failure to successfully expand into new asset classes or new geographies may adversely affect our growth strategy and our future profitability.

Our continued growth will require increased investment by us in technology, facilities, personnel, and financial and management systems and controls. It also will require expansion of our procedures for monitoring and assuring our compliance with applicable regulations, and we will need to integrate, train and manage a growing employee base. The expansion of our existing businesses, any expansion into new businesses and the resulting growth of our employee base will increase our need for internal audit and monitoring processes, which may be more extensive and broader in scope than those we have historically required. We may not be successful in identifying or implementing all of the processes that are necessary. Further, unless our growth results in an increase in our revenues that is proportionally greater than or equal to the increase in our costs associated with this growth, our business, financial condition and operating results will be adversely affected.

Our ability to implement or amend rules could be limited or delayed because of regulation, which could negatively affect our ability to implement needed changes.

Our exchanges registered with the SEC must submit proposed rule changes to the SEC for its review and, in many cases, its approval. Even where a proposed rule change may be effective upon filing with the SEC, the SEC retains the right to suspend and disapprove such a rule change. Also, the CFTC may stay or disapprove rules that we file with it for CFE or Hotspot SEF. The rule review process can be lengthy and can significantly delay the implementation of proposed rule changes that we believe are necessary to the operation of our markets. If the SEC or CFTC delays or does not allow one of our exchanges to implement a rule change, this could negatively affect our ability to make needed changes or implement business activities.

Similarly, the SEC must approve amendments to our exchange subsidiaries’ certificates of incorporation and bylaws as well as certain amendments to the certificate of incorporation and bylaws of CBOE Holdings. The SEC may decide not to approve a proposed amendment or may delay such approval in a manner that could negatively affect our ability to make a desired change, which could prevent or delay us from improving the operations of our markets or recognize income from new products.

As one of the world's largest exchange holding companies, we may be at a greater risk for a cyber attack and other cyber security risks.

The frequency of cyber attacks is increasing in general, and a variety of threat actors have specifically targeted the financial services industry. At the date of this filing, we have no evidence of any material cases of data theft, corruption or destruction of data or compromised customer data. However, there is no assurance that this will remain the case. Security breaches may lead to increased scrutiny by our regulators and have significant costs in terms of cash outlays, business disruption, revenue losses, internal labor, overhead and other expenses. Measures we implement to monitor our network

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environment and protect our infrastructure against security breaches and misappropriation of our intellectual property assets may prove insufficient, which could cause us to lose market participants, experience lower trading volume, incur significant liabilities or have a negative impact on our competitive advantage.

Changes in the tax laws and regulations affecting us and our market participants could have a material adverse effect on our business.

Legislation may be proposed, both domestically and internationally, that could change the way that our market participants are taxed on the products they trade on our markets. If such proposals were to become law, they could have a negative impact on the securities industry and on us by making transactions more costly to market participants, which may reduce trading and could make our markets less competitive.

In 2015, the Internal Revenue Service issued final and temporary regulations under Section 871(m) that require dividend tax withholding for certain transactions completed by foreign persons that could result in a reduction in trading by such foreign persons, either by their choice or as a result of brokers refusing to execute certain option trades for such persons.

In addition to proposed tax changes that could affect our market participants, like other corporations, we are subject to taxes at the federal, state and local levels, as well as in non-U.S. jurisdictions. Changes in tax laws, regulations or policies could result in our having to pay higher taxes, which would in turn reduce our net income. There has been a trend toward states changing income tax laws to increase the apportionment factors on which state income taxes are based and becoming more aggressive asserting nexus over corporations that are not domiciled in the state. If state income tax laws change, or if states are successful asserting nexus against us, we may become subject to income taxes in additional states or at a higher rate in the states where income tax filing requirements exists. If this occurs, we may experience a higher effective state tax rate.

We selectively explore acquisition opportunities and strategic alliances relating to other businesses, products or technologies. We may not be successful in integrating other businesses, products or technologies with our business. Any such transaction also may not produce the results we anticipate, which could adversely affect our business, financial condition and operating results.

We selectively explore and pursue acquisition and other opportunities to strengthen our business and grow our company. We may enter into business combination transactions, make acquisitions or enter into strategic partnerships, joint ventures or alliances, any of which may be material. The market for acquisition targets and strategic alliances is highly competitive, which could make it more difficult to find appropriate merger or acquisition opportunities. If we are required to raise capital by incurring debt or issuing additional equity for any reason in connection with a strategic acquisition or investment, financing may not be available or the terms of such financing may not be favorable to us and our stockholders, whose interests may be diluted by the issuance of additional stock.

The process of integration may produce unforeseen regulatory issues and operating difficulties and expenditures and may divert the attention of management from the ongoing operation of our business and harm our reputation. We may not successfully achieve the integration objectives, and we may not realize the anticipated cost savings, revenue growth and synergies in full or at all, or it may take longer to realize them than expected, any of which could negatively impact our business, financial condition and operating results. See also “Risks Relating to the Merger” for additional information.

Prior to the Merger, Bats generated a significant percentage of its total revenues from, and was provided with significant liquidity in its markets and other services by, entities who are affiliates of its former significant stockholders, and there is no assurance that such entities will continue to generate such revenue or provide such liquidity and other services following the Merger.

Prior to the Merger, Bats earned a significant percentage of its revenue from customers who are affiliates of its former significant stockholders. In addition, Bats relied on, and we continue to rely on, certain entities who are affiliates of former significant Bats stockholders to route orders that were not routed directly by Bats and to clear certain trades routed to other markets. The proportionate stake in the combined company of these former Bats stockholders is significantly less than their stake in Bats prior to the Merger, so there may be less incentive for the affiliates of Bats’ former stockholders to maintain their business relationships with us at the pre-existing levels or at all. If the affiliates of Bats’ former stockholders do not remain customers at their pre-existing levels or at all or if any of the affiliates of Bats’ former stockholders do not continue to route and clear trades as they did prior to the Merger, we may experience decreased revenues and business interruptions, which could have a material adverse effect on our business, financial condition and operating results.

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Fluctuations in our quarterly operating results may negatively affect the valuation of our common stock.

Our business experiences seasonal fluctuations, reflecting reduced trading activity generally during the third quarter of each year and during the last month of each year. As a result, it is possible that our operating results or other operating metrics may fail to meet the expectations of stock market analysts and investors. If this happens, the market price of our common stock may be adversely affected.

We may be required to inject further capital into OCC or EuroCCP.

OCC is the sole provider of clearing on all of our options and futures exchanges. Under OCC's capital plan, each of OCC's existing exchange stockholders, which include CBOE, agreed to provide its pro rata share in replenishment capital, up to a maximum of $40 million per exchange stockholder, if certain capital thresholds are breached. In addition, BTL owns 20% of EuroCCP, which is one of three interoperable central counterparties used to clear trades conducted on Bats Europe. If OCC or EuroCCP were to experience financial difficulties, CBOE and Bats Europe, as applicable, might be required to inject further capital into them in order to maintain their working or regulatory capital. In a worst case scenario, OCC or EuroCCP, as applicable, might have their regulatory license suspended or withdrawn, or might have to wind down. This may result in a loss to CBOE and Bats Europe of their respective investments in OCC and EuroCCP and withdrawals of OCC or EuroCCP as clearing houses, which could have a material adverse effect on our business, financial condition and operating results.

Our operations outside of the U.S. expose us to currency risk.

In addition to our operations in the U.S., we have operations in the U.K., continental Europe, Ecuador and Singapore. We, therefore, have significant exposure to exchange rate movements between the British pound, the Euro, the Singapore dollar against the U.S. dollar. Significant inflation or changes in foreign exchange rates with respect to one or more of these currencies could occur as a result of general economic conditions, acts of war or terrorism, changes in governmental monetary or tax policy, Brexit or changes in local interest rates. These exchange rate differences will affect the translation of our non‑U.S. results of operations and financial condition into U.S. dollars as part of our consolidated financial statements.

Any decision to pay dividends on our common stock is at the discretion of our board of directors and depends upon the earnings of our operating subsidiaries. Accordingly, there can be no guarantee that we will pay dividends to our stockholders.

Any decision to pay dividends on our common stock in the future will be at the discretion of our board of directors, which may determine not to declare dividends at all or at a reduced amount. The board’s determination to declare dividends will depend upon our profitability and financial condition, contractual restrictions, restrictions imposed by applicable law and the SEC and other factors that the board deems relevant. As a holding company with no significant business operations of its own, CBOE Holdings depends entirely on distributions, if any, it may receive from its subsidiaries to meet its obligations and pay dividends to its stockholders. If these subsidiaries are not profitable, or even if they are and they determine to retain their profits for use in their businesses, we will be unable to pay dividends to our stockholders.

Certain provisions in our organizational documents could prevent or delay a change of control.

Our organizational documents contain provisions that could block actions that stockholders might find favorable, including discouraging, delaying or preventing a change of control or any unsolicited acquisition proposals for us. These include provisions:


•	prohibiting stockholders from acting by written consent;


•	requiring advance notice of director nominations and of business to be brought before a meeting of stockholders; and


•	limiting the persons who may call special stockholders’ meetings.

In addition, our organizational documents include provisions that:


•	restrict any person from voting or causing the voting of shares of stock representing more than 20% of our outstanding voting capital stock; and


•	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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Furthermore, our board of directors has the authority to issue shares of preferred stock in one or more series and to fix the rights and preferences of these shares without stockholder approval. Any series of our preferred stock is likely to be senior to our common stock with respect to dividends, liquidation rights and, possibly, voting rights. The ability of the board of directors to issue preferred stock also could have the effect of discouraging unsolicited acquisition proposals, thus adversely affecting the market price of our common stock.

Delaware law makes it difficult for stockholders that have recently acquired a large interest in a corporation to cause the merger or acquisition of the corporation against the board’s wishes. Under Section 203 of the Delaware General Corporation Law, a Delaware corporation may not engage in any merger or other business combination with an interested stockholder for a period of three years following the date that the stockholder became an interested stockholder except in limited circumstances, including by approval of the corporation’s board of directors.

We indirectly hold 100% of the issued share capital and voting rights in BTL and its wholly owned subsidiary, Chi-X Europe. As a result, any person who holds, or has voting power with respect to, 10% or more of the outstanding shares of our common stock is subject to certain regulatory requirements under U.K. law.

A person that indirectly acquires control in a FCA entity is required to file a change in control notice with the FCA. Though both are FCA regulated entities, the statutorily prescribed change in control notification threshold for BTL is acquisition of voting power with respect to 20% or more of the issued share capital thereof. The change in control notification threshold for Chi-X Europe is acquisition of voting power with respect to 10% or more of the issued share capital thereof. Therefore, any person who holds, or has voting power with respect to, 10% or more of the outstanding shares of our common stock will be required to file a change in control notice in respect of Chi-X Europe and, if this holding is in excess of 20%, also for BTL. This obligation may discourage, delay or prevent accumulations of 10% or more of our common stock.

Risks Relating to the Merger

We may not realize all of the anticipated benefits of the Merger or such benefits may take longer to realize than expected.

Our ability to realize the anticipated benefits of the Merger will depend, to a large extent, on our ability to integrate our businesses with Bats’ businesses. The combination of two independent companies is a complex, costly and time-consuming process. As a result, our combined company is required to devote significant management attention and resources to integrating our business practices and operations with those of Bats. If integration is implemented ineffectively, it could preclude realization of the full benefits expected from the Merger, including synergies, cause an interruption of, or a loss of momentum in, the activities of the combined company and could seriously harm our results of operations. In addition, the overall integration of the two companies may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of client relationships and diversion of management’s attention, and may cause our stock price to decline. The difficulties of operating our combined company include:


•	unanticipated issues in migrating information technology, communications and other systems;


•	unforeseen expenses or delays associated with the integration or the Merger;


•	managing a significantly larger company;


•	the potential diversion of management focus and resources from other strategic opportunities and from operational matters;


•	maintaining employee morale and retaining key management and other key employees;


•	integrating two unique business cultures, which may prove to be incompatible;


•	the possibility of faulty assumptions underlying expectations regarding the integration process and expense synergies;


•	integrating corporate and administrative infrastructures and eliminating duplicative operations;


•	coordinating geographically separate organizations;


•	managing costs or inefficiencies associated with integrating the operations of the combined company; and


•	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.

Many of these factors are outside of our control, and any one of them could result in increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy, which could materially adversely impact our business, financial condition and results of operations. In addition, even if the combined company’s operations are integrated successfully, we may not realize the full benefits of the Merger, including the synergies, cost savings and growth opportunities. These benefits may not be achieved within the anticipated time frame, or at all. As a result, we cannot assure you that the Merger will result in the realization of the full benefits anticipated.

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We incurred substantial indebtedness to finance the Merger, which may decrease our business flexibility and adversely affect our business, financial condition and operating results.

We incurred indebtedness of approximately $1.65 billion to finance a portion of the cash component of the Merger consideration, refinance indebtedness of Bats and its subsidiaries and pay related fees and expenses. The indebtedness consists of a $1 billion unsecured term loan facility and $650 million in senior unsecured notes. We also entered into a $150 million revolving credit facility in December 2016, which may be used to fund working capital and for other general corporate purposes. Prior to entering into the merger agreement, we did not have any indebtedness and were not subject to any financial covenants. The financial and other covenants to which we have agreed and our increased indebtedness may have the effect of reducing our flexibility to respond to changing business and economic conditions, thereby placing us at a competitive disadvantage compared to competitors that have less indebtedness and making us more vulnerable to general adverse economic and industry conditions. Our increased indebtedness will also increase future borrowing costs, and the covenants pertaining thereto may also limit our ability to repurchase shares of our common stock, increase dividends or obtain additional financing to fund working capital, capital expenditures, acquisitions or general corporate requirements. We are also required to dedicate a larger portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow for other purposes, including working capital, capital expenditures and general corporate purposes. Further, a portion of our borrowings are at variable rates of interest, which exposes us to the risk of increased interest rates unless we enter into offsetting hedging transactions.

Our ability to make payments on and to refinance our debt obligations and to fund planned capital expenditures depend on our ability to generate cash from our operations. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

We may not be able to refinance any of our indebtedness on commercially reasonable terms, or at all. If we cannot service our indebtedness, we may have to take actions such as selling assets, seeking additional equity or reducing or delaying capital expenditures, strategic acquisitions, investments and alliances, any of which could impede the implementation of our business strategy or prevent us from entering into transactions that would otherwise benefit our business. Additionally, we may not be able to effect such actions, if necessary, on commercially reasonable terms, or at all. Any of the foregoing consequences could adversely affect our business, financial condition and operating results.

Deterioration in our credit profile may increase our costs of borrowing money.

We have received investment grade credit ratings from S&P Global Ratings (BBB+) and Moody’s Investor Service (Baa1). Ratings from credit agencies are not recommendations to buy, sell or hold our securities, and each rating should be evaluated independently of any other rating. There is no assurance that we will maintain such credit ratings, since credit ratings may be lowered or withdrawn entirely by a rating agency if, in its judgment, the circumstances warrant. If a rating agency were to downgrade our rating below investment grade, our borrowing costs could increase.

A failure to migrate our information technology systems successfully following the Merger or a material disruption in our information technology systems could adversely affect our business, financial condition and operating results.

We rely extensively on our information technology systems. The failure of information technology systems to operate effectively, difficulty in migrating our information technology systems, inconsistencies in standards, controls, procedures and policies and problems with transitioning to upgraded or replacement systems could adversely impact our business, financial condition and operating results. In addition, a number of our TPHs are not connected to Bats’ technology platforms and must complete the process of connecting to these platforms as part of the migration.

The process of migrating information technology systems may take longer, cost more and provide fewer synergies than initially anticipated. There may also be new regulations adopted during the transition period that require systems changes, which could divert attention away from migration process and cause delays. To the extent this occurs, the benefits of the proposed transaction may be reduced or delayed or may never come to fruition. Although our combined management team has experience with migrating other businesses to Bats’ technology platform, there are certain portions of our business, such as open outcry trading and complex order trading that have not yet been supported by Bats’ technology platform.

We currently expect to complete the migration of our information technology systems in phases over a four-year period following the Merger. However, we may not be able to successfully achieve the transition on the timetable currently contemplated, and the transition may not be successful or could encounter various difficulties and unexpected issues. Any delays or issues that we encounter in the transition could have a material adverse effect on our businesses and could negatively

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affect our reputation, which in turn could have a material adverse effect on our overall business, results of operations and financial condition, as well as impair customer confidence in our product offerings and overall services.

If our goodwill, investments in non-consolidated subsidiaries and intangible assets become impaired, the resulting charge to earnings may be significant.

Accounting standards in the U.S. require that one party to the Merger be identified as the acquirer. In accordance with these standards, the Merger was accounted for as an acquisition of Bats by CBOE Holdings and will follow the acquisition method of accounting for business combinations. The assets and liabilities of Bats were consolidated with our assets and liabilities. The excess of the purchase price over the fair values of Bats’ assets and liabilities was recorded as goodwill.

We will be required to assess investments in non-consolidated subsidiaries and intangible assets for impairment at least annually. Goodwill impairment testing is performed annually in the fiscal fourth quarter or more frequently if conditions exist that indicate that the asset may be impaired. In the future, we may take charges against earnings resulting from impairment. Any determination requiring the write-off of a significant portion of our goodwill, intangible assets or investments in non-consolidated subsidiaries could adversely affect our results of operations and financial condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Share repurchase program

In 2011, the board of directors approved an initial authorization for the Company to repurchase shares of its outstanding common stock of $100 million and approved additional authorizations of $100 million in each of 2012, 2013, 2014, 2015, and February 2016 for a total authorization of $600 million. The program permits the Company to purchase shares through a variety of methods, including in the open market or through privately negotiated transactions, in accordance with applicable securities laws. It does not obligate the Company to make any repurchases at any specific time or situation.

As of March 31, 2017, the Company had $97.0 million of availability remaining under its existing share repurchase authorizations. We were not active in our share repurchase program during the first quarter of 2017.

Purchase of common stock from employees

The table below reflects the purchase of common stock by the Company in the three months ended March 31, 2017 to satisfy employees' tax obligations upon the vesting of restricted stock:



Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2017 – January 31, 2017	—	$	—	—	—
February 1, 2017 – February 28, 2017	92,962	80.72		—	—
March 1, 2017 – March 31, 2017	5,246	81.32		—	—
Totals	98,208	$	80.75	—	—

Use of Proceeds

None.

Purchases of Equity Securities

None.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

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Not applicable.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

The exhibits to this Report are listed in the Exhibit Index included elsewhere herein.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



		CBOE HOLDINGS, INC.
		Registrant

		By:	/s/ Edward T. Tilly
			Edward T. Tilly
			Chief Executive Officer (Principal Executive Officer)
Date:	May 11, 2017

		By:	/s/ Alan J. Dean
			Alan J. Dean
			Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Date:	May 11, 2017

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EXHIBIT INDEX



Exhibit No.		Description
10.1		Bats Global Markets, Inc. 2009 Stock Option Plan, incorporated by reference to Exhibit 10.1 to Bats Global Markets, Inc.’s Registration Statement on Form S-1 (File No. 333-208565) filed on December 16, 2015.*

10.2		Bats Global Markets, Inc. Third Amended and Restated 2012 Equity Incentive Plan, incorporated by reference to Exhibit 10.2 to Bats Global Markets, Inc.’s Registration Statement on Form S-1 (File No. 333-208565) filed on December 16, 2015.*

10.3		Form of Stock Option Award Agreement pursuant to the Bats Global Markets, Inc. 2009 Stock Option Plan, incorporated by reference to Exhibit 10.3 to Bats Global Markets, Inc.’s Registration Statement on Form S-1 (File No. 333-208565) filed on December 16, 2015.*

10.4		Form of Stock Option Award Agreement pursuant to the Bats Global Markets, Inc. Third Amended and Restated 2012 Equity Incentive Plan, incorporated by reference to Exhibit 10.4 to Bats Global Markets, Inc.’s Registration Statement on Form S-1 (File No. 333-208565) filed on December 16, 2015.*

10.5		Form of Restricted Stock Award Agreement pursuant to the Bats Global Markets, Inc. Third Amended and Restated 2012 Equity Incentive Plan, incorporated by reference to Exhibit 10.5 to Bats Global Markets, Inc.’s Registration Statement on Form S-1 (File No. 333-208565) filed on December 16, 2015.*

10.6		Bats Global Markets, Inc. 2016 Omnibus Incentive Plan, incorporated by reference to Exhibit 99.3 to Bats Global Markets, Inc.’s Registration Statement on Form S-8 (File No. 333-210841) filed on April 20, 2016.*

10.7		Form of Restricted Stock Award Agreement under Bats Global Markets, Inc. 2016 Omnibus Incentive Plan (filed herewith).*

10.8		Form of U.S. Executive Employment Agreement between Bats Global Markets, Inc. and certain executive officers, incorporated by reference to Exhibit 10.15 to Amendment No. 3 to Bats Global Markets, Inc.’s Registration Statement on Form S-1 (File No. 333-208565) filed on April 4, 2016.*

10.9		Form of U.K. Executive Employment Agreement between Bats Global Markets, Inc. and certain executive officers, incorporated by reference to Exhibit 10.16 to Amendment No. 3 to Bats Global Markets, Inc.’s Registration Statement on Form S-1 (File No. 333-208565) filed on April 4, 2016.*

10.10		Employment Agreement, by and among CBOE Holdings, Inc., Chicago Board Options Exchange, Incorporated, C2 Options Exchange, Incorporated and Edward Tilly, dated February 27, 2017 (filed herewith).*

10.11		Employment Agreement, by and among CBOE Holdings, Inc., Chicago Board Options Exchange, Incorporated, C2 Options Exchange, Incorporated and Christopher Concannon, dated February 27, 2017 (filed herewith).*

10.12		Offer Letter Agreement, by and between CBOE Holdings, Inc. and Christopher Isaacson, dated September 25, 2016 (filed herewith).*

10.13		Offer Letter Agreement, by and between CBOE Holdings, Inc. and Mark Hemsley, dated September 25, 2016 (filed herewith).*

10.14		Retirement Agreement, by and among CBOE Holdings, Inc., Chicago Board Options Exchange, Incorporated, C2 Options Exchange, Incorporated and Edward Provost, dated February 28, 2017 (filed herewith).*

10.15		Retirement Agreement, by and among CBOE Holdings, Inc., Chicago Board Options Exchange, Incorporated, C2 Options Exchange, Incorporated and Gerald O'Connell, dated February 27, 2017 (filed herewith).*

10.16		Amended and Restated CBOE Holdings, Inc. Executive Severance Plan (filed herewith).*

10.17		Form of Restricted Stock Award Agreement for Non-employee Directors (filed herewith).*

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).

Table of Contents



Exhibit No.		Description
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).

*Indicates Management Compensatory Plan, Contract or Arrangement.

Exhibit 10.7

BATS GLOBAL MARKETS, INC.

2016 OMNIBUS INCENTIVE PLAN

RESTRICTED STOCK AWARD

___________________, ____

Subject to the terms and conditions set forth in this grant letter (the “ Grant Letter ”) and Exhibits A and B (the Grant Letter and Exhibits A and B together constituting this “ Agreement ”), Bats Global Markets, Inc., a Delaware corporation (the “ Company ”), has granted you as of the Grant Date set forth below an award of Restricted Stock (the “ Award ”). The Award is granted under and is subject to the Bats Global Markets, Inc. 2016 Omnibus Incentive Plan (the “ Plan ”). Unless defined in this Agreement, capitalized terms shall have the meanings assigned to them in the Plan. In the event of a conflict among the provisions of the Plan, this Agreement and any descriptive materials provided to you, the provisions of the Plan shall control.

AWARD TERMS

PARTICIPANT:

GRANT DATE:

SHARES SUBJECT TO AWARD:

VESTING TERMS:

Please review this Agreement and let us know if you have any questions about this Agreement, the Award or the Plan. You are advised to consult with your own tax advisors in respect of any tax consequences arising in connection with this Award.

If you have questions please contact Thad Prososki, VP, Human Resources, via telephone at 913.815.7183, or via email at tprososki@bats.com. If not, please sign and date this Agreement where indicated below.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.



BATS GLOBAL MARKETS, INC.
By:
	Name:	Chris Concannon
	Title:	CEO




	Name

Date:

EXHIBIT A

BATS GLOBAL MARKETS, INC.

RESTRICTED STOCK AGREEMENT

THIS AGREEMENT, made and entered into on the date of the Grant Letter, by and between Bats Global Markets, Inc. (the “ Company ”), a Delaware corporation, and the individual listed in the Grant Letter as the Participant.

WHEREAS, the Participant has been granted the Award under the Plan;

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein, and for other good and valuable consideration, the parties hereto agree as follows.

1. Award of Shares . Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Participant is hereby awarded the number of Shares of Restricted Stock set forth in the Grant Letter, subject to the terms and conditions of the Plan and those herein set forth. The Award is granted as of the date set forth in the Grant Letter.

2. Terms and Conditions . It is understood and agreed that the Award evidenced hereby is subject to the following terms and conditions:

(a) Vesting of Award . The Award shall vest as set forth in the Grant Letter. Any adjustments to the Shares under Section 5(c) of the Plan shall be subject to the vesting schedule set forth herein and shall be paid to the Participant upon any vesting of the Award set forth hereunder in respect of which such dividends or other amounts are payable. Notwithstanding the foregoing, all regular cash dividends (i.e., not extraordinary dividends or dividends paid in property other than cash) will not be subject to the vesting schedule set forth herein and will be paid on a current basis on the same terms applicable to other Company stockholders.

(b) Termination of Service; Forfeiture of Unvested Shares . In the event of Termination of Service of the Participant prior to the date on which the Award otherwise becomes vested, the unvested portion of the Award shall immediately be forfeited by the Participant and become the property of the Company. Notwithstanding the foregoing, in the event of the Participant’s Termination of Service other than by the Company for Cause, the Committee may, in its sole discretion, accelerate the vesting of the Award or waive any term or condition of this Agreement, subject to such terms and conditions as the Committee deems appropriate, with respect to all or a portion of the Award.

(c) Change of Control . Notwithstanding any provision of this Agreement to the contrary, if, within twelve (12) months following a Change of Control, the Award (or a substitute award) remains outstanding and the Participant incurs a Termination of Service without Cause or for Good Reason, the Award shall become immediately vested in full and all restrictions shall lapse upon such Termination of Service. For purposes of this Agreement, “ Good Reason ” means “Good Reason” as defined in the Participant’s employment or similar agreement with the Company, if any, or if not so defined, the occurrence of any of the following events, in each case without the Participant’s consent: (i) a material reduction in the Participant’s base compensation or bonus opportunity, other than any such reduction that applies generally to similarly situated employees or executives of the Company, (ii) relocation of the geographic location of the Participant’s principal place of employment or service by more than 50 miles from the Participant’s current principal place of employment or service or (iii) a material reduction in the Participant’s title, duties, responsibilities or authority.

(d) Death; Disability . In the event of the Participant’s Termination of Service at any time due to the Participant’s death or Disability, the Award shall fully vest on the date of such Termination of Service.

(e) Evidence of Award . The Company shall record the Award on its books and records, in a manner generally consistent with its procedures for recording stock ownership, which may include book-entry registration or issuance of a stock certificate or certificates. In the event that any stock certificate is issued in respect of the Award, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Award.

(f) No Right to Continued Employment . This Award shall not confer upon the Participant any right with respect to continuance of employment by the Company or any Subsidiary nor shall this Award interfere with the right of the Company or any Subsidiary to terminate the Participant’s employment at any time.

(g) No Right to Future Awards . The Participant acknowledges that the Award is a one-time extraordinary award and does not constitute a promise of future grants. The Company, in its sole discretion, maintains the right to make, or not to make, additional grants of Shares under the Plan.

3. Transfer of Shares . Any vested Shares delivered hereunder, or any interest therein, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, the provisions of this Agreement, applicable federal and state securities laws or any other applicable laws or regulations and the terms and conditions hereof.

4. Tax Liability; Withholding Requirements .

(a) The Participant shall be solely responsible for any applicable taxes (including, without limitation, income and excise taxes) and penalties, and any interest that accrues thereon, that the Participant incurs in connection with the receipt or vesting (or, as set forth below, the date of an election by the Participant under Section 83(b)) of any restricted stock granted hereunder.

(b) The Company may withhold any tax (or other governmental obligation) that becomes due with respect to the restricted stock and take such action as it deems appropriate to ensure that all applicable withholding, income or other taxes, which are the sole and absolute responsibility of Participant, are withheld or collected from Participant. The Participant shall make arrangements satisfactory to the Company to enable the Company to satisfy all such withholding requirements. Notwithstanding the foregoing, the Committee may, in its sole discretion, permit the Participant to satisfy any such withholding requirement by transferring to the Company pursuant to such procedures as the Committee may require, effective as of the date on which such requirement arises, a number of Shares or other benefits to which the Participant is otherwise entitled and designated by the Participant having an aggregate Fair Market Value as of such date that is equal to the minimum amount required to be withheld. If the Committee permits the Participant to satisfy any such withholding requirement pursuant to the preceding sentence, the Company shall remit to the Internal Revenue Service and appropriate state and local revenue agencies, for the credit of the Participant, an amount of cash withholding equal to the Fair Market Value of the Shares transferred to the Company as provided above.

5. Section 83(b) Election . The Participant may elect to be taxed on the Grant Date with respect to Restricted Stock rather than when such restrictions lapse by filing an election under Section 83(b) of the Code in a form similar to that set forth in Exhibit B hereto with the Internal Revenue Service within thirty (30) days after the Grant Date.

THE PARTICIPANT ACKNOWLEDGES THAT IT IS HIS OR HER SOLE RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A TIMELY ELECTION UNDER SECTION 83(b), EVEN IF THE PARTICIPANT REQUESTS THE COMPANY OR ITS

REPRESENTATIVES MAKE THIS FILING ON THE PARTICIPANT’S BEHALF. THE PARTICIPANT IS RELYING SOLELY ON HIS OR HER OWN ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER OR NOT TO FILE ANY 83(b) ELECTION.

6. Not Salary, Pensionable Earnings or Base Pay . The Participant acknowledges that the Award shall not be included in or deemed to be a part of (a) salary, normal salary or other ordinary compensation, (b) any definition of pensionable or other earnings (however defined) for the purpose of calculating any benefits payable to or on behalf of the Participant under any pension, retirement, termination or dismissal indemnity, severance benefit, retirement indemnity or other benefit arrangement of the Company or any Affiliate or (c) any calculation of base pay or regular pay for any purpose.

7. Forfeiture Upon Breach of Certain Other Agreements . The Participant’s breach of any noncompete, nondisclosure, nonsolicitation, assignment of inventions, or other intellectual property agreement that the Participant may be a party to with the Company or any Affiliate, in addition to whatever other equitable relief or monetary damages that the Company or any Affiliate may be entitled to, shall result in automatic rescission, forfeiture, cancellation, and return of any Shares (whether or not otherwise vested) held by the Participant.

8. Recoupment/Clawback . This Award may be subject to recoupment or “clawback” as may be required by applicable law, stock exchange rules or by any applicable Company policy or arrangement, as it may be established or amended from time to time.

9. References . References herein to rights and obligations of the Participant shall apply, where appropriate, to the Participant’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Agreement.

10. Miscellaneous .

(a) Notices . Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Bats Global Markets, Inc.

8050 Marshall Drive, Suite 120

Lenexa, KS 66214

Attention: General Counsel

Facsimile: (913) 815-7119

If to the Participant:

At the Participant’s most recent address shown on the Company’s corporate records, or at any other address which the Participant may specify in a notice delivered to the Company in the manner set forth herein.

(b) Entire Agreement . This Award Agreement, the Plan and any other agreements, schedules, exhibits and other documents referred to herein or therein constitute the entire agreement and understanding between the parties in respect of the subject matter hereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise, between the parties with respect to the subject matter hereof.

(c) Severability . If any provision of this Award Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or would disqualify the Plan or this Award Agreement under any law deemed applicable by the Board, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Board, materially altering the intent of this Award Agreement, such provision shall be stricken as to such jurisdiction, and the remainder of this Award Agreement shall remain in full force and effect.

(d) Amendment; Waiver . No amendment or modification of any provision of this Award Agreement that has a material adverse effect on the Participant shall be effective unless signed in writing by or on behalf of the Company and the Participant, provided that the Company may amend or modify this Award Agreement without the Participant’s consent in accordance with the provisions of the Plan or as otherwise set forth in this Award Agreement. No waiver of any breach or condition of this Award Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature. Any amendment or modification of or to any provision of this Award Agreement, or any waiver of any provision of this Award Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.

(e) Assignment . Neither this Award Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Participant.

(f) Successors and Assigns; No Third-Party Beneficiaries . This Award Agreement shall inure to the benefit of and be binding upon the Company and the Participant and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Award Agreement, express or implied, is intended to confer on any Person other than the Company and the Participant, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Award Agreement.

(g) Governing Law; Waiver of Jury Trial . This Award Agreement shall be governed by the laws of the State of Delaware, without application of the conflicts of law principles thereof. By acknowledging this Award Agreement electronically or signing it manually, as applicable, the Participant waives any right that the Participant may have to trial by jury in respect of any litigation based on, arising out of, under or in connection with this Award Agreement or the Plan.

(h) Participant Undertaking; Acceptance . The Participant agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or give effect to any of the obligations or restrictions imposed on either the Participant or the Restricted Stock pursuant to this Award Agreement. The Participant acknowledges receipt of a copy of the Plan and this Award Agreement and understands that material definitions and provisions concerning the Restricted Stock and the Participant’s rights and obligations with respect thereto are set forth in the Plan. The Participant has read carefully, and understands, the provisions of this Award Agreement and the Plan.

(i) Dispute Resolution . Except as provided in the last sentence of this paragraph to the fullest extent permitted by law, the Company and each Participant agree to waive their rights to seek remedies in court, including but not limited to rights to a trial by jury. The Company and each Participant agree that any dispute between or among them and/or their affiliates arising out of, relating to or in connection with this Plan will be resolved in accordance with a confidential two-step dispute resolution procedure involving: (a) Step One: non-binding mediation, and (b) Step Two: binding arbitration under the Federal Arbitration Act, 9 U.S.C. § 1, et. seq., or state law, whichever is applicable. Any such mediation or arbitration hereunder shall be under the auspices of the American Arbitration Association (“ AAA ”) pursuant to its then current AAA Commercial Arbitration Rules. No arbitration shall be initiated or take place with respect to a given dispute if the parties have successfully achieved a mutually agreed to resolution of the dispute as a result of the Step One mediation. The mediation session(s) and, if necessary, the arbitration hearing shall be held in the city/location selected by the

Company in its sole discretion. The arbitration (if the dispute is not resolved by mediation) will be conducted by a single AAA arbitrator, selected by the Company in its sole discretion. Any award rendered by the arbitrator, including with respect to responsibility for AAA charges (including the costs of the mediator and arbitrator), will be final and binding, and judgment may be entered on it in any court of competent jurisdiction. In the unlikely event the AAA refuses to accept jurisdiction over a dispute, the Company and each Grantee agree to submit to JAMS mediation and arbitration applying the JAMS equivalent of the AAA Commercial Arbitration Rules. If AAA and JAMS refuse to accept jurisdiction, the parties may litigate in a court of competent jurisdiction.

(j) Counterparts . This Agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

EXHIBIT B

Election to Include in Gross Income for Year of

Transfer of Property Pursuant to Section 83(b)

of the Internal Revenue Code

FILE ONE COPY WITH YOUR EMPLOYER AND ONE COPY WITH IRS OFFICE WHERE YOU FILE YOUR TAX RETURN WITHIN 30 DAYS OF DATE OF TRANSFER SHOWN IN ITEM 3 BELOW AND ATTACH ONE COPY TO YOUR TAX RETURN. THE FILING WITH THE IRS OFFICE SHOULD BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED.

The undersigned hereby makes an election pursuant to Section 83(b) of the Internal Revenue Code with respect to the property described below and supplies the following information in accordance with the regulations promulgated thereunder:


1.	The name, address and taxpayer identification number of the undersigned are:

Name

Address

Social Security Number


2.	Description of property with respect to which the election is being made:

______ Shares of Voting Common Stock of Bats Global Markets, Inc., subject to the restrictions set forth in paragraph 4 below (“ Restricted Stock ”).


3.	Date on which property was transferred is _________ __, 20___.


4.	Nature of restrictions to which property is subject:

The property is Restricted Stock acquired under the Bats Global Markets, Inc. 2016 Omnibus Incentive Plan which is not transferable and is subject to a substantial risk of forfeiture within the meaning of Section 83(c)(1) of the Internal Revenue Code upon a termination of employment occurring prior to _________ __, 20___.

5. The fair market value at the time of transfer (determined without regard to any restrictions other than restrictions which by their terms will never lapse) of the property with respect to which this election is being made is $____.

6. The amount paid by taxpayer for said property is $____.

7. A copy of this statement has been furnished to:




Name of Employer

Dated: _________ __, 20___
		(Signature of Taxpayer)

Exhibit 10.10

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“ Agreement ”) is made and entered into as of this 27 ^th day of February 2017, by and between CBOE HOLDINGS, INC. (“ Holdings ”), the CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED (“ CBOE ”), C2 OPTIONS EXCHANGE, INCORPORATED (“ C2 ” and, unless indicated otherwise, referred to herein together with Holdings and CBOE as “ Employer ”) and EDWARD TILLY (“ Employee ”).

WITNESSETH:

WHEREAS , Employer and Employee entered into an Employment Agreement (the " Prior Agreement ") effective January 1, 2013, providing for the Employee's employment and setting forth the terms and conditions for such employment;

WHEREAS, on September 25, 2016, Holdings entered into an Agreement and Plan of Merger with Bats Global Markets, Inc. (“ Bats ”) pursuant to which a wholly owned subsidiary of Holdings will merge with and into Bats, causing Bats to become a wholly owned subsidiary of Holdings (such transaction, the “ Merger ”); and

WHEREAS , in connection with the Merger and effective as of the date hereof (the “ Effective Date ”), Employer and Employee desire to terminate the Prior Agreement and to enter into this Agreement to provide for certain changes to the terms and conditions of the Employee's employment by the Employer, as reflected in this Agreement.

NOW, THEREFORE , in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Employment .

(a) During the Term (as defined below), Employer shall continue to employ Employee as its Chairman and Chief Executive Officer, and Employee shall perform such duties as may be consistent with such position.

(b) Employee agrees to devote his full business time and efforts to the affairs of Employer and to the performance of his duties as its Chief Executive Officer and Chairman of the Board. In doing so, he agrees to conduct himself at all times in a manner consistent with the excellent reputation of Employer.

(c) Employee agrees not to accept any membership on the board of directors of any other private or public corporation (other than CBOE affiliates) without the prior written approval of the Board. The Board will grant such approval if, in its discretion, such membership will present no conflict of interest or interference with Employee's duties as Chief Executive Officer and Chairman of the Board.

(d) In accordance with the Employers' bylaws, Employer will nominate Employee as a director for stockholder approval at each annual meeting during the Term in which his term as a director is due to expire.

2. Term. Employee’s employment under this Agreement shall commence on the Effective Date and shall expire on December 31, 2019 (the “ Initial Term ”), unless terminated earlier pursuant to the provisions of Sections 5, 6, 7 or 8 hereof. The term of employment shall be renewed automatically for successive periods of one (1) year each (a “ Renewal Term ”) after the expiration of the Initial Term, unless Employer provides Employee, or Employee provides Employer, with written notice to the contrary at least one hundred eighty (180) days prior to the end of the Initial Term or any Renewal Term. The Initial Term and any Renewal Terms are collectively referred to herein as the “ Term .” If either Employer or Employee elects not to renew the Term of this Agreement in accordance with this Section 2 and Employee thereafter continues in employment with Employer, Employee shall be employed on an at-will basis and the terms of such employment and any subsequent termination of employment shall be subject solely to the general employment practices and policies of Employer.

3. Compensation. Employer shall pay to Employee the following for all services to be performed by Employee during the Term:

(a) A base salary (“ Base Salary ”) at the rate of $1,150,000 per annum. Base Salary shall be payable in substantially equal regular installments in accordance with Employer's practices for other senior executives, as such practices may be determined from time to time. The Compensation Committee of the Board (the “ Committee ”) shall review the rate of Base Salary in such manner and at such time as is applicable to other senior executives, with any revised rate of salary to become the “Base Salary” for all purposes of this Agreement. In no event shall Employee's Base Salary be decreased below the Base Salary in effect as of the Effective Date.

(b) In addition to the aforementioned annual Base Salary, Employee shall be eligible to participate in any bonus or incentive program applicable to other senior executives of Employer during the Term. For 2017, Employee’s target annual bonus or incentive payment shall be $1,897,500. Any bonus or incentive payment for a fiscal year of Employer shall be payable to Employee as soon as practicable after the end of such year, and in no event later than March 15 of the year immediately following the year in which it was earned.

(c) Employee shall be eligible for equity incentive awards under the Second Amended and Restated CBOE Holdings, Inc. Long-Term Incentive Plan, or any similar or successor plan (the “ LTIP ”), in amounts and subject to such terms as determined by the Committee in its sole discretion. For 2017, Employee’s target annual equity incentive compensation award shall have a grant date value of $3,000,000. The vesting terms relating to such awards, including the terms that apply in connection with a Change in Control, shall be no less favorable than those that apply to other senior executives of Employer.

(d) All payments under this Agreement of Base Salary and bonus, and incentive payments and severance payments and benefits, if any, shall be subject to such deductions as may be required to be made pursuant to law, government regulation, or order, or by agreement with, or consent of, Employee.

4. Additional Benefits .

be subject to an accounting by Employee and approval by Employer. Employer also shall pay for all fees and expenses of Employee’s legal and other professional advisors in connection with the negotiation of the terms of this Agreement, in an amount not to exceed $15,000.

(b) Benefit Plans. During the Term, Employee shall be entitled to participate in, and receive benefits under, (i) any qualified or supplemental retirement, savings or deferred compensation plan, program or arrangement currently made available by Employer for its senior executives, and (ii) any such additional or substitute plan, program or arrangement that Employer may make available in the future and during the Term for its senior executives (“ Benefit Plans ”), subject to and on a basis consistent with the terms, conditions and overall administration of each such Benefit Plan.

(c) Vacations, Holidays, and Other Perquisites and Fringe Benefits. Employee shall be entitled to five weeks paid vacation during each calendar year commencing during the Term. Employee shall also be entitled to all paid holidays and other perquisites and fringe benefits that are enjoyed by similarly situated personnel, provided that Employee shall not be entitled to participate in any perquisite or fringe benefit that has been frozen to new participants as of the Effective Date.

(d) Insurance Benefits. During the Term, Employee and his dependents shall be entitled to participate in, and receive benefits under, (i) any health and dental plan, disability plan, accidental death and dismemberment plan, survivor income plan, and life insurance plan or arrangement currently made available by Employer for its senior executives, and (ii) any such additional or substitute plan or arrangement that Employer may make available in the future and during the Term for its senior executives (“ Insurance Plans ”), subject to and on a basis consistent with the terms, conditions, and overall administration of each such Insurance Plan.

5. Termination. Upon the termination of Employee's employment for any reason, Employee shall be deemed to have resigned as of the date of Employee's termination of employment from all offices, directorships and fiduciary positions with Employer, its affiliates and employee benefit plans unless Employee is affirmatively re-appointed or re-elected to such position as of the date of Employee's termination of employment.

(a) Termination For Cause. The Board, by vote of a majority of its members, may terminate the employment of Employee with Employer at any time during the Term for “Cause.” For purposes of this Agreement, “ Cause ” shall be deemed to exist if, and only if:

(i) Employee shall engage, during the performance of his duties hereunder, in acts or omissions constituting dishonesty, intentional breach of fiduciary obligation, intentional wrongdoing, gross negligence, or malfeasance that results in material harm to Employer;

(ii) Employee shall intentionally disobey or disregard a lawful and proper direction of the Board or Employer, or refuse to perform his duties and responsibilities under this Agreement; provided that in each case (a) Employer has notified Employee in writing that the direction, duty or responsibility is one that, if not complied with, would constitute a “Cause” event under this Agreement, and (b) Employee does not cure the conduct within thirty (30) days following receipt by Employee of such written notification from Employer;

(iii) Employee shall materially breach this Agreement, and such breach by its nature, is incapable of being cured, or such breach remains uncured for more than thirty (30) days following receipt by Employee of written notice from Employer specifying the nature

of the breach and demanding the cure thereof. For purposes of this clause (iii), a material breach of this Agreement that involves inattention by Employee to his duties under this Agreement shall be deemed a breach capable of cure; or

(iv) Employee shall commit willful misconduct in connection with the performance of his duties, provided that Employer first gives Employee written notice of its intention to terminate and the grounds for such termination within ninety (90) days following the date the Board is informed of such grounds at a meeting of the Board and Employee has not, within thirty (30) days following receipt of such notice, cured such misconduct (if capable of cure) in a manner that is reasonably satisfactory to the Board.

Without limiting the generality of the foregoing, the following shall not constitute Cause for termination of Employee or the modification or diminution of any of his authority hereunder: (x) any personal or policy disagreement between Employee and Employer or any member of the Board; or (y) any action taken by Employee in connection with his duties hereunder or any failure to act, if Employee acted or failed to act in good faith and in a manner Employee reasonably believed to be in, and not opposed to, the best interest of Employer, and Employee has no reasonable cause to believe his conduct was unlawful. In addition, Employee's employment shall be deemed to have terminated for Cause if, after Employee's employment has terminated, facts and circumstances are discovered that would have justified a termination for Cause under Section 5(a) above.

Notwithstanding anything herein to the contrary, if Employer shall terminate the employment of Employee hereunder for Cause, Employer shall give at least thirty (30) days prior written notice to Employee specifying in detail the reason or reasons for Employee's termination. If the employment of Employee is terminated by Employer for Cause, Employee's accrued but unpaid Base Salary (based upon the annual rate in effect on the date of termination) shall be paid to Employee through the date of his termination, and, except as otherwise provided in Section 24 of this Agreement and in any Benefit Plan or Insurance Plan, Employer shall have no further obligation, including any obligation for Severance Benefits (as defined herein), to Employee under this Agreement. Such termination shall have no effect upon Employee's rights under the Benefit Plans, the Insurance Plans and other employee policies and practices of Employer applicable to such termination.

(b) Termination Without Cause. The Board, by vote of a majority of its members, may terminate the employment of Employee without Cause, at any time during the Term, as of a date at least thirty (30) days after the date a written notice of such termination is delivered by Employer to Employee. In such event, Employer shall, subject to the terms of Section 12 and Section 21 of this Agreement, pay or otherwise provide to Employee:

(i) Employee’s accrued but unpaid Base Salary (based upon the annual rate in effect on the date of termination) through the date of termination, to be paid within thirty (30) days of termination;

(ii) A pro-rated bonus (the “ Pro-Rated Bonus ”) equal to the bonus that Employee would have received for the calendar year in which Employee’s employment terminates, based on actual performance for such year, multiplied by a fraction, the numerator of which shall equal the number of calendar days Employee was employed by Employer for the year in which his employment terminates and the denominator of which shall equal three hundred sixty-five (365), to be paid in a cash lump sum on the date on which annual bonuses are paid

pursuant to Employer’s normal payroll practices (but not in any event later than March 15 of the year following the year in which the termination of employment occurs);

(iii) A lump sum cash severance payment (the “ Severance Payment ”) in an amount equal to the sum of (A) two (2) times Employee’s annual rate of Base Salary in effect on the date of termination and (B) two (2) times the target bonus for the year in which Employee’s employment is terminated, to be paid within thirty (30) days of termination;

(iv) If Employee’s employment is terminated prior to Employee receiving an annual grant under the LTIP for 2016 performance, a pro-rated equity award under the LTIP, equal to the value of Employee’s equity award approved in 2016, multiplied by a fraction, the numerator of which equals the number of calendar days Employee was employed by Employer for the calendar year in which Employee's employment terminates and the denominator of which equals 365, to be paid within thirty (30) days of termination (the “ Pro-Rated Equity Award ”);

(v) A lump sum cash payment (the “ Benefit Plan Payment ”) in an amount equal to the aggregate amount of all Employer contributions that Employee or his account would have received had his employment continued for a period equal to two (2) years under the following Benefit Plans: (A) Chicago Board Options Exchange SMART Plan; (B) Chicago Board Options Exchange, Incorporated Supplemental Retirement Plan; and (C) Chicago Board Options Exchange Executive Retirement Plan, or in each case any successor plan, to be paid within thirty (30) days of termination.

(vi) Provided that Employee timely elects the continuation of coverage to which Employee and Employee’s spouse and dependents would be entitled under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“ COBRA ”), Employer shall also pay Employee's COBRA premiums (or an amount equal to Employee's COBRA premiums) (sufficient to cover full family health care) for a period of eighteen (18) months following the termination of his employment and, at the end of such period, Employer shall reimburse Employee’s premiums for medical coverage for Employee and his dependents under a comparable individual health insurance policy for an additional six (6) months.

The foregoing notwithstanding, Employer's obligation to pay the COBRA and supplemental premiums described in Section 5(b)(vi) above (collectively, the “ Insurance Premiums ”) shall cease on the date Employee becomes eligible for comparable coverage under another group health plan that does not impose pre-existing condition limitations on Employee's coverage. Nothing herein shall be construed to extend the period of time over which COBRA continuation coverage may be provided to Employee or his dependents beyond that mandated by law. The Pro-Rated Bonus, Severance Payment, Pro-Rated Equity Award, Benefit Plan Payment and Insurance Premiums described in this Section 5(b) shall be referred to herein collectively as the “ Severance Benefits .” Except as otherwise provided in this Section 5(b), in Section 24 of this Agreement, and in any Benefit Plan or Insurance Plan of Employer, Employer shall have no further obligation to Employee under this Agreement following the date his employment is terminated without Cause.

is fully corrected within thirty (30) days after Employee gives Employer written notice thereof. For purposes of this Agreement, “Good Reason” shall be deemed to exist if, and only if, without Employee's express written consent, Employer or a successor employer:

(i) shall assign to Employee authorities (including officer titles), duties or responsibilities that are inconsistent in any material and adverse respect with Employee's authorities, duties or responsibilities with Employer as contemplated by this Agreement (including any material and adverse diminution of such authorities, duties or responsibilities);

(ii) shall materially reduce the base compensation of Employee;

(iii) shall require Employee to relocate his principal business office or his principal place of residence outside the Chicago metropolitan area, or assign to Employee duties that would reasonably require such relocation;

(iv) shall terminate, reduce or limit Employee's participation in any bonus, target bonus or incentive arrangement relative to the level of participation of other senior executives of similar rank, based upon an arbitrary decision of Employer rather than a decision reasonably related to the level of job performance of Employee; provided, however, that such action with respect to Employee's participation shall only constitute Good Reason under this Agreement if the action results in materially reducing the aggregate value of Employee's incentive compensation below the aggregate value as of the Effective Date; or

(v) shall materially breach any of the terms of this Agreement.

A termination of Employee's employment for Good Reason shall be effectuated by giving Employer written notice of the termination within ninety (90) days of the date Employee knew or should have known that the event constituted Good Reason, setting forth in reasonable detail the specific conduct of Employer that constitutes Good Reason and the specific provisions of this Agreement on which Employee relies. Notwithstanding anything herein to the contrary, if Employee shall terminate his employment for Good Reason, Employer shall pay to Employee his accrued but unpaid Base Salary (based upon the annual rate in effect on the date of termination or the date immediately prior to Employer's actions described in subsections (ii) and (iv) above, whichever is greater) through the date of termination and the Severance Benefits on the same terms and subject to the same conditions as described in Section 5(b) hereof. Except as otherwise provided in this Section 5(c), in Section 24 of the Agreement, and in any Benefit Plan or Insurance Plan of Employer, Employer shall have no further obligation to Employee under this Agreement following the date he terminates his employment for Good Reason.

(d) Voluntary Termination without Good Reason. Employee may terminate his employment without Good Reason at any time during the Term as of a date at least thirty (30) days after the date a written notice of such termination is delivered by Employee to Employer. If the employment of Employee is terminated by Employee without Good Reason, Employee's accrued but unpaid Base Salary (based upon the annual rate in effect on the date of termination) shall be paid to Employee through the date of his termination, and, except as otherwise provided in Section 24 of this Agreement or in any Benefit Plan or Insurance Plan, Employer shall have no further obligation, including any obligation for Severance Benefits, to Employee under this Agreement. Such termination shall have no effect upon Employee's rights under the Benefit Plans, the Insurance Plans and other employee policies and practices of Employer applicable to such termination.

6. Death. If Employee dies during the Term, Employer shall pay (i) Employee's Base Salary (based on the annual rate in effect on the date of death) through the date of death, and (ii) within ninety (90) days following the date of death, the Severance Benefits to his beneficiary last designated by written instrument delivered by Employee to Employer prior to the date of death. If no such designated beneficiary shall survive Employee, such payments and benefits shall be paid and provided to Employee's surviving spouse, or if none, to his lawful descendants per stirpes then living, or if none shall survive him, to the legal representative of his estate, or if none is appointed within ninety (90) days of the date of his death, to his heirs at law under the laws of the state in which he is domiciled at the date of his death. Any Severance Benefits payable under this Section 6 are in addition to any other benefits due to Employee's beneficiaries or dependents from Employer, under any Benefit Plan or Insurance Plan. Except as otherwise provided in this Section 6, in Section 24 of this Agreement, or in any Benefit Plan or Insurance Plan, Employer shall have no further obligations with respect to Employee or his beneficiaries or dependents under this Agreement following the date of his death.

7. Disability .

(a) If Employee is Permanently Disabled for a continuous period of six (6) months during the Term, Employer may terminate Employee's employment under this Agreement upon thirty (30) days prior written notice to Employee. In such event Employer shall pay to Employee (i) his accrued but unpaid Base Salary (based on the annual rate in effect on the date of termination) through the date of termination, and (ii) within thirty (30) days following the date of such termination, the Severance Benefits.

(b) For purposes of this Agreement, the term “ Permanently Disabled ” shall have the meaning set forth in the long-term disability policy or plan maintained by Employer for its senior executives then in effect. In the absence of such a policy or plan, the term Permanently Disabled shall have the meaning ascribed to the term “disability” under Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), and the regulations and guidance promulgated thereunder.

(c) Except as otherwise provided in this Section 7, in Section 24 of this Agreement, and in any Benefit Plan or Insurance Plan of Employer, Employer shall have no further obligation to Employee under this Agreement following the date his employment is terminated due to him becoming Permanently Disabled. Such termination shall have no effect upon Employee's rights under the Benefit Plans, the Insurance Plans and other employee policies and practices of Employer applicable to such termination.

8. Change in Control .

(a) Sale Payment . If during the eighteen (18) month period following a Change in Control that occurs during the Term of the Agreement (1) Employee is terminated by Employer or a successor employer without Cause or (2) Employee terminates his employment with Employer or a successor employer for Good Reason, in lieu of any payments to which Employee may otherwise be entitled under Section 5 hereof, and subject to Sections 12 and 21, Employee shall be paid the following (the “ Sale Payment ”): (i) his accrued but unpaid Base Salary (based upon the annual rate in effect on the date of termination) through the date of termination, and (ii) the Severance Benefits (payable on the same terms and conditions as described in Section 5(b) of this Agreement, except that Employer’s obligation for supplemental medical premium reimbursement shall be for a period of eighteen (18) months, instead of six (6) months, following the initial eighteen (18) month COBRA premium

reimbursement period, subject to earlier termination on the terms described in Section 5(b)). For purposes of this Agreement, a “ Change in Control ” means the first to occur of the following:

(i) The acquisition by any “person” as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 (a “ Person ”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934) of voting securities of Holdings or any successor thereto (the “ Corporation ”) where such acquisition causes such Person to own 35% or more of the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the “ Outstanding Voting Securities ”); provided that for purposes of this paragraph (i), the following acquisitions will not be deemed to result in a Change in Control: (w) any acquisition directly from the Corporation, (x) any acquisition by the Corporation, (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any affiliate of the Corporation or (z) any acquisition by any corporation or entity pursuant to a transaction that complies with clauses (A), (B) and (C) of paragraph (iii) of this definition below; and provided further that if any Person’s beneficial ownership of the Outstanding Voting Securities reaches or exceeds 50% as a result of a transaction described in clause (w) or (x) above, and such Person subsequently acquires beneficial ownership of additional voting securities of the Corporation, such subsequent acquisition will be treated as an acquisition that causes such Person to own 35% or more of the Outstanding Voting Securities;

(ii) Individuals who, as of the day after the Effective Date, constitute the Board (the “ Incumbent Board ”) cease for any reason to constitute at least a majority of the Board, provided that any individual becoming a director subsequent to the day after the Effective Date whose election, or nomination for election by the Corporation’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(iii) The approval by the stockholders of the Corporation and consummation of (x) a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of the Corporation or (y) the acquisition of assets or stock of another corporation in exchange for voting securities of the Corporation (each of (x) and (y), a “ Business Combination ”); excluding, however, such a Business Combination pursuant to which (A) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that as a result of such transaction owns the Corporation or all or substantially all of the Corporation’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Voting Securities, (B) no Person (excluding any employee benefit plan (or related trust) of the Corporation or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly (except to the extent that such

ownership existed prior to the Business Combination), an amount of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation representing 20% thereof; and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(iv) Approval by the stockholders of the Corporation of a complete liquidation or dissolution of the Corporation.

(b) Excess Parachute Payments.

(i) No Tax Gross-Up . In the event that a Change in Control shall occur, and a final determination is made by legislation, regulation, or ruling directed to Employee or Employer, by court decision, or by independent tax counsel described in paragraph (ii) next below, that the aggregate amount of any payments made to Employee (1) under this Agreement, and (2) pursuant to any Benefit Plan, Insurance Plan or plan, program or policy of Employer in connection with, on account of, or as a result of, such Change in Control (“ Total Payments ”) will be subject to an excise tax under the provisions of Section 4999 of the Code, or any successor section thereof (“ Excise Tax ”), the Total Payments shall be reduced so that the maximum amount of the Total Payments (after reduction) shall be one dollar ($1.00) less than the amount that would cause the Total Payments to be subject to the Excise Tax; provided, however, that the Total Payments shall only be reduced to the extent that the after-tax value of amounts received by Employee after application of the above reduction would exceed the after-tax value of the amounts received without application of such reduction. For this purpose, the after-tax value of an amount shall be determined taking into account all federal, state, and local income, employment, and excise taxes applicable to such amount. In making any determination as to whether the Total Payments would be subject to an Excise Tax, consideration shall be given to whether any portion of the Total Payments could reasonably be considered, based on the relevant facts and circumstances, to be reasonable compensation for services rendered (whether before or after the consummation of the applicable Change in Control). To the extent Total Payments must be reduced pursuant to this Section, Employer, without consulting Employee, will reduce the Total Payments to achieve the best economic benefit to Employee, and to the extent economically equivalent, on a pro-rata basis.

(ii) Procedure for Determinations . All determinations required to be made under this Section 8(b), and the assumptions to be utilized in arriving at such determinations, shall be made by Independent Tax Counsel selected by Employee and approved by Employer (which approval shall not be unreasonably withheld), and such determination shall be conclusive and binding on all parties. Employer shall provide such information as Independent Tax Counsel may reasonably request, and such counsel may engage accountants or other experts at Employer's expense to the extent that such counsel deems necessary or advisable to enable it to reach a determination. The term “ Independent Tax Counsel ,” as used herein, shall mean a law firm of recognized expertise in federal income tax matters that has not previously advised or represented either party hereto. It is hereby agreed that neither Employer nor Employee shall engage any such Independent Tax Counsel as counsel for any purpose, other than to make the determination provided for herein, for three (3) years following such firm's announcement of its determination.

(iii) Internal Revenue Service Claims . In the event that upon any audit by the Internal Revenue Service, or by a state or local taxing authority, of the Total Payments, a change is formally determined to be required in the amount of taxes paid by Employee, appropriate adjustments will be made under this Agreement such that the net amount that is payable to Employee after taking into account the provisions of Code Section 4999 will reflect the intent of the parties as expressed in this Section. Employee shall notify Employer in writing of any claim by the Internal Revenue Service that, if successful, would require payment of an Excise Tax or an additional Excise Tax on the Total Payments (a “ Claim ”). Such notification shall be given as soon as practicable but no later than ten (10) business days after Employee is informed in writing of such Claim and shall apprise Employer of the nature of such Claim and the date on which such Claim is requested to be paid. Employee shall not pay such Claim prior to the expiration of the thirty (30)-day period following the date on which Employee gives such notice to Employer (or such shorter period ending on the date that any payment of taxes with respect to such Claim is due). If Employer notifies Employee in writing prior to the expiration of such period that it desires to contest such Claim, Employee shall: (A) give Employer any information reasonably requested by Employer relating to such Claim, (B) take such action in connection with contesting such Claim as Employer shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such Claim by an attorney reasonably selected by Employer, (C) cooperate with Employer in good faith in order to contest effectively such Claim, and (D) permit Employer to participate in any proceedings relating to such Claim; provided, however, that Employer shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Employee harmless, on an after-tax basis, for any Excise Tax, additional Excise Tax, or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this subparagraph (iii), Employer, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such Claim and may, at its sole option, either direct Employee to pay the tax claimed and sue for a refund or contest the Claim in any permissible manner, and Employee agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as Employer shall determine, provided, however, that if Employer directs Employee to pay such Claim and sue for a refund, Employer shall advance the amount of such payment to Employee on an interest-free basis or, if such an advance is not permissible thereunder, pay the amount of such payment to Employee as additional compensation, and shall indemnify and hold Employee harmless, on an after-tax basis, from any Excise Tax, additional Excise Tax, or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or additional compensation; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of Employee with respect to which such contested amount is claimed to be due is limited solely to such contested amount.

determination is made that Employee shall not be entitled to any refund with respect to such Claim and Employer does not notify Employee in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid.

9. Restrictive Covenants. For purposes of this Section 9 and Section 10, each reference to “Employer” includes Employer and its affiliates (including, but not limited to, Holdings, CBOE and C2). Employee understands the global nature of Employer's businesses and the effort Employer undertakes to develop and protect its business and its competitive advantage. Accordingly, Employee agrees that the scope and duration of the restrictions described in this Agreement are reasonable and necessary to protect the legitimate business interests of Employer. Employee further agrees that during the period of his employment and for a period of two years following a termination of Employee's employment pursuant to Section 5(a), 5(b), 5(c), 5(d), 7 or 8 hereof, Employee shall not:

(a) singly, jointly, or in any other capacity, in a manner that contributes to any research, technology, development, account, trading, marketing, promotion, or sales and that relates to Employee's service with Employer, directly or beneficially, manage, join, participate in the management, operation or control of, or work for (as an employee, consultant or independent contractor), or permit the use of his name by, or provide financial or other assistance to, or be connected in any manner with, any options exchange or alternative trading system that directly competes with Employer, without the express written approval of the Lead Director of the Board;

(b) provide any service or assistance that (1) is of the general type of service or assistance provided by Employee to Employer, (2) relates to any technology, account, product, project or piece of work, with which Employee was involved during his employment with Employer, and (3) contributes to causing an entity to come within the definition described in paragraph (a) above;

(c) solicit or accept if offered to him, with or without solicitation, on his own behalf or on behalf of any other person, the services of any person who is a then current employee of Employer (or was an employee of Employer during the year preceding such solicitation), nor solicit any of Employer's then current employees (or an individual who was employed by or engaged by Employer during the year preceding such solicitation) to terminate employment or an engagement with Employer, nor agree to hire any then current employee (or an individual who was an employee of Employer during the year preceding such hire) of Employer into employment with himself or any company, individual or other entity; or

(d) directly or indirectly divert or attempt to divert from Employer any business in which Employer has been actively engaged during the Term, nor interfere with the relationships of Employer with its sources of business.

10. Confidentiality.

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 Employee by any law, regulation or order of any court or regulatory commission, department or agency. Employee further agrees that if his employment by Employer is terminated for any reason, he will not take with him, but will leave with Employer, all records and papers and all matter of whatever nature that bears Secret or Confidential Information of Employer. 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, Employer'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 Employer, that has not been published or disclosed to the general public, the options industry or the commodities futures industry; provided, however, that such term shall not include knowledge, skills, and information that is common to the trade or profession of Employee.

(b) Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement prohibits Employee from confidentially or otherwise communicating or filing a charge or complaint with a governmental or regulatory entity, participating in a governmental or regulatory entity investigation, or giving truthful testimony or making other disclosures to a governmental or regulatory entity (in each case, without having to disclose any such conduct to Employer), or from responding if properly subpoenaed or otherwise required to do so under applicable law. In addition, nothing in this Agreement limits Employee’s right to receive an award from a governmental or regulatory entity for information provided to such an entity (and not as compensation for actual or alleged personal injury or damages to Employee).

(c) Pursuant to the Defend Trade Secrets Act of 2016 (18 U.S.C. 1833(b)), Employee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence either directly or indirectly to a federal, state, or local government official, or to an attorney, solely for the purpose of reporting or investigating a violation of law. Employee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret made in a complaint, or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Employee files a lawsuit or other action alleging retaliation by Employer for reporting a suspected violation of law, Employee may disclose the trade secret to his attorney and use the trade secret in the court proceeding or other action, if Employee files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order. This paragraph will govern to the extent it may conflict with any other provision of this Agreement.

11. Remedies. Employee consents and agrees that if he violates any provisions of Sections 9 or 10 of this Agreement, Employer 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 him from committing or continuing any violation of Sections 9 or 10 hereof. If, at any time, Employee violates or threatens to violate, to any material extent, any of the covenants or agreements set forth in Sections 9 or 10 of this Agreement, Employer shall have the right to terminate the employment of Employee for Cause in accordance with the provisions of paragraph (a) of Section 5 hereof. In the event that Employee 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 so long as Employee was in violation of that provision.

12. Release. Notwithstanding anything herein to the contrary, as a condition to receiving any severance payments or benefits under this Agreement, Employee agrees to execute a release of claims (in a form substantially similar to the form set forth in Exhibit A, which is attached hereto and made a part hereof) (the “ Release ”). Employee must deliver to Employer an original, signed Release and the revocability period (if any) must elapse by the Release Deadline. For purposes of this Section, the “ Release Deadline ” means the date that is sixty (60) calendar days after Employee's termination of employment. No severance payments or benefits under this Agreement shall be made or provided prior to the date that both (i) Employee has delivered an original, signed Release to Employer and (ii) the revocability period (if any) has elapsed. Payment of any severance payments or benefits that are not exempt from Section 409A of the Code shall be delayed until the Release Deadline, irrespective of when Employee executes the Release; provided, however, that where Employee's termination of employment and the Release Deadline occur within the same calendar year, the payment may be made up to thirty (30) days prior to the Release Deadline, and provided further that where Employee's termination of employment and the Release Deadline occur in two separate calendar years, payment may not be made before the later of January 1 of the second year or the date that is thirty (30) days prior to the Release Deadline. If Employee does not deliver an original, signed Release to Employer by the Release Deadline, (i) Employee's rights shall be limited to those made available to Employee as if Employee were terminated under Section 5(d) above, and (ii) Employer shall otherwise have no obligation to pay or provide to Employee any severance payments or benefits described in this Agreement, or any other monies on account of the termination of Employee's employment.

13. Assignment. Neither Employee nor Employer may assign this Agreement, except that Employer's obligations hereunder shall be binding legal obligations of any successor to all or substantially all of Employer's business by purchase, merger, consolidation, or otherwise.

14. Employee Assignment. No interest of Employee or his spouse, dependent or any other beneficiary under this Agreement, or any right to receive any payment or distribution hereunder, shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind, nor may such interest or right to receive a payment or distribution be taken, voluntarily or involuntarily, for the satisfaction of the obligations or debts of, or other claims against, Employee or his spouse, dependent or any other beneficiary, including claims for alimony, support, separate maintenance, and claims in bankruptcy proceedings.

15. Benefits Unfunded. (i) All rights of Employee and his spouse, dependent or any other beneficiary under this Agreement shall at all times be entirely unfunded and no provision shall at any time be made with respect to segregating any assets of Employer for payment of any amounts due hereunder; (ii) neither Employee nor his spouse, dependent or any other beneficiary shall have any interest in or rights against any specific assets of Employer; and (iii) Employee and his spouse, dependent or any other beneficiary shall have only the rights of a general unsecured creditor of Employer.

16. Waiver. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of any other provisions or conditions at the same time or at any prior or subsequent time.

17. Applicable Law. This Agreement shall be construed and interpreted pursuant to the internal laws of the State of Illinois, without regard to principles of conflicts of laws. 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).

18. Entire Agreement. This Agreement contains the entire agreement between Employer and Employee, and supersedes any and all other previous agreements, written or oral, between the parties relating to the subject matter hereof, including, without limitation, the Prior Agreement. No amendment or modification of the terms of this Agreement shall be binding upon either of the parties hereto unless reduced to writing and signed by each of the parties hereto.

19. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.

20. Severability. The parties agree that this Agreement shall be construed in a way to make each of its provisions enforceable, but that the unenforceability of one (1) or more provisions in one (1) or more instances will not make invalid the entire Agreement or any other provisions of this Agreement as all of its provisions are severable. In the event a provision may be unenforceable as written, the parties agree that it shall be partially enforced to the extent permitted by law. The unenforceability of a provision in one instance shall not affect its enforceability in other instances.

21. Compliance . The payments and benefits under this Agreement are intended to comply with or be exempt from Section 409A of the Code and the interpretative guidance thereunder, including the exceptions for short-term deferrals, separation pay arrangements, reimbursements, and in-kind distributions, and shall be administered accordingly. The Agreement shall be construed and interpreted with such intent. If any provision of this Agreement needs to be revised to satisfy the requirements of Section 409A of the Code, then such provision shall be modified or restricted to the extent and in the manner necessary to be in compliance with such requirements of the Code and any such modification will attempt to maintain the same economic results as were intended under this Agreement. Employer cannot guarantee that the payments and benefits that may be paid or provided pursuant to this Agreement will satisfy all applicable provisions of Section 409A of the Code. Notwithstanding any provision of this Agreement to the contrary, any compensation or benefit payable under this Agreement that constitutes a deferral of compensation under Section 409A of the Code shall be subject to the following:

(a) Whenever a payment under this Agreement specifies a payment period, the actual date of payment within such specified period shall be within the sole discretion of Employer, and Employee shall have no right (directly or indirectly) to determine the year in which such payment is made. In the event a payment period straddles two consecutive calendar years, the payment shall be made in the later of such calendar years.

(b) No compensation or benefit that is subject to the requirements of Section 409A of the Code and that is payable upon Employee's termination of employment shall be paid unless Employee's termination of employment constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h), and references in this Agreement to "termination," "termination of employment" or like terms shall mean a "separation from service."

in a lump sum to Employee, and any remaining compensation and benefits due under the Agreement shall be paid or provided as otherwise set forth herein. The determination of whether Employee is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his separation from service shall be made by Employer in accordance with the terms of Section 409A of the Code.

(d) Each separately identified amount to which Employee is entitled to payment and each installment payment payable hereunder shall be deemed to be a separate payment for purposes of Section 409A of the Code.

(e) With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A of the Code, (i) the right to payment or reimbursement or in-kind benefits shall not be subject to liquidation or exchange for any other benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any taxable year of Employee shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that the foregoing clause (ii) shall not be violated by any lifetime and other annual limits provided under Employer’s health plans and (iii) such payments shall be made on or before the last day of Employee’s taxable year following the taxable year in which the expense was incurred.

(f) The payment of any compensation or benefit that is subject to the requirements of Section 409A of the Code may not be accelerated except to the extent permitted by Section 409A of the Code.

(g) The payment of any tax gross-up payment will be made by the end of Employee's taxable year next following Employee's taxable year in which he remits the related taxes. Reimbursement of expenses incurred by Employee due to a tax audit or litigation addressing the existence or amount of a tax liability will be made by the end of Employee's taxable year following Employee's taxable year in which the taxes that are the subject of the audit or litigation are remitted to the taxing authority, or where as a result of such audit or litigation no taxes are remitted, the end of Employee's taxable year following Employee's taxable year in which the audit is completed or there is a final and nonappealable settlement or other resolution of the litigation.

22. Successors. This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, representatives and successors.

23. Notices. Notices required under this Agreement shall be in writing and sent by personal delivery, or by registered U.S. mail, return receipt requested, to the following addresses, or to such other address as the party being notified may have previously furnished to the other by written notice:

If to Employer:

Chicago Board Options Exchange, Incorporated

400 S. LaSalle Street

Chicago, Illinois 60605

Attention: Lead Director of the Board and Chief Human Resources Officer

If to Employee:

At the most recent address on file with the Company

24. Indemnity. Holdings, CBOE and C2 shall indemnify, protect, defend and save Employee harmless from and against any threatened, pending, contemplated or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, in which Employee is made a party by reason of the fact that Employee is or was an officer, employee or agent of Employer, or any judgment, amount paid in settlement (with the consent of Employer), fine, loss, expense, cost, damage and reasonable attorneys' fees incurred by reason of the fact that Employee is or was an officer, employee or agent of Employer; provided, however, that Employee acted in good faith and in a manner he reasonably believed to be in the best interests of Employer, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Employer, at its expense, shall have the right to purchase and maintain insurance or fidelity bonds on behalf of Employee against any liability asserted against him and incurred by him in his capacity as an officer, employee, or agent of Employer. Employee shall also be indemnified under the Certificate of Incorporation and By-Laws of Holdings, CBOE or C2, and covered by directors' and officers' liability insurance policies that are the same as or equivalent to those Holdings, CBOE or C2 currently carries for its or their other executives.

25. Clawback . Notwithstanding anything in this Agreement to the contrary, all incentive compensation paid to Employee pursuant to this Agreement or otherwise in connection with Employee’s employment with Employer shall be subject to applicable law, as may be in effect from time to time, including, without limitation, the provisions of any Employer policy to the extent required by Section 10D of the Securities Exchange Act of 1934 and any applicable rules or regulations issued by the Securities and Exchange Commission or any national securities exchange or national securities association on which Employer stock may be traded.

26. Headings. The headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of any provision of this Agreement.

IN WITNESS WHEREOF , Employee has hereunto set his hand, and Employer has caused these presents to be executed in its name on its behalf, all as of the date first above written.

/s/ Edward T. Tilly 2/27/2017

Edward T. Tilly Date

CBOE Holdings, Inc.

By: /s/ Alan J. Dean

Title: Executive Vice President, Chief Financial Officer

Chicago Board Options Exchange, Incorporated

By: /s/ Alan J. Dean

Title: Executive Vice President, Chief Financial Officer

C2 Options Exchange, Incorporated

By: /s/ Alan J. Dean

Title: Executive Vice President, Chief Financial Officer

Exhibit A

RELEASE OF CLAIMS

THIS RELEASE OF CLAIMS (“ Release ”) is made and entered into this _______ day of _____________20__, to be effective as of (the “ Effective Date ”), by and between CBOE HOLDINGS, INC. (“ Holdings ”), CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED (“ CBOE ”), C2 OPTIONS EXCHANGE, INCORPORATED (“ C2 ” and, unless indicated otherwise, referred to herein together with Holdings and CBOE as “ Employer ”) and EDWARD TILLY, a resident of the State of Illinois (“ Tilly ”)

1. In consideration of Employer's payment to Tilly of the severance pay and benefits described in the Employment Agreement by and between Employer and Tilly (the “ Employment Agreement ”), to which Tilly is not otherwise entitled and the sufficiency of which Tilly acknowledges, Tilly does hereby fully, finally and unconditionally release and forever discharge Employer, Employer's subsidiaries and affiliates, and the former and current officers, directors, employees, members, representatives and agents and all of their respective predecessors, successors, and assigns of Employer and Employer's subsidiaries and affiliates (collectively “ Released Parties ”), in their personal, corporate and representative capacities, from any and all rights, claims, liabilities, obligations, damages, costs, expenses, attorneys' fees, suits, actions, and demands, of any and every kind, nature and character, known or unknown, liquidated or unliquidated, absolute or contingent, in law and in equity, enforceable or arising under any local, state or federal common law, statute or ordinance relating to Tilly's past employment with Employer or any past actions, statements, or omissions of Employer or any of the Released Parties occurring prior to Tilly's execution of this Release, including but not limited to all claims for defamation, wrongful termination, back pay and benefits, pain and suffering, negligent or intentional infliction of emotional distress, breach of contract, and interference with contractual relations, tort claims, employment discrimination claims, and all claims arising under the Age Discrimination in Employment Act of 1967, as amended (“ ADEA ”), Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1866, as amended by the Civil Rights Act of 1991 (42 U.S.C. § 1981), the Family and Medical Leave Act, the Equal Pay Act, the Fair Labor Standards Act, the Americans with Disabilities Act, the Older Workers Benefit Protection Act, the Illinois Human Rights Act, the Workers Adjustment and Retraining Act, and the Chicago and Cook County Human Rights Ordinances, and any other statutory, contract, implied contract, or common law claim arising out of or involving Tilly's employment, the termination of Tilly's employment, or any continuing effects of Tilly's employment with Employer.

2. Tilly agrees not to sue Employer or any of the Released Parties with respect to rights and claims covered by this Release. If any government agency or court assumes jurisdiction of any charge, complaint, or cause of action covered by this Release, Tilly will not seek and will not accept any personal equitable or monetary relief in connection with such investigation, action, suit, or legal proceeding.

3. Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement prohibits Tilly from confidentially or otherwise communicating or filing a charge or complaint with a governmental or regulatory entity, participating in a governmental or regulatory entity investigation, or giving truthful testimony or making other disclosures to a governmental or regulatory entity (in each case, without having to disclose any such conduct to Employer), or from responding if properly subpoenaed or otherwise required to do so under applicable law. In addition, nothing in this Agreement limits Tilly’s right to receive an award from a governmental or regulatory entity for information provided to such an entity (and not as compensation for actual or alleged personal injury or damages to Tilly).

4. Tilly has twenty-one (21) days (until ______________, 20___) within which to consider this Release, although Tilly may accept it at any time within those twenty-one (21) days. Once Tilly has signed this Release, Tilly will still have seven (7) days in which to revoke his acceptance of the ADEA portion of the Release by notifying Employer, and specifically, its Chief Human Resources Officer. The ADEA portion of the Release will not be effective or enforceable until the seven (7) day revocation period has expired. If the ADEA portion of the Release is revoked, the remainder of this Release shall remain in full force and effect as to all of its terms except for the release of claims under the ADEA, and Employer will have three (3) business days to rescind the entire Release by so notifying Tilly.

5. Tilly agrees that he will continue to be governed by those obligations arising under Sections 9, 10 and 11 of the Employment Agreement, which are incorporated by reference herein, shall not be released, shall be unaffected hereby, and shall remain in full force and effect.

6. This Release shall be binding upon and inure to the benefit of Employer and its successors and assigns and Tilly and his heirs, executors and administrators.

7. This Release shall be construed and interpreted under the laws of the State of Illinois to the extent not preempted by applicable laws of the United States.

Edward Tilly Dated:

CBOE HOLDINGS, INC.

By: _________________________________

Its: _________________________________

Dated:_______________________________

CHICAGO BOARD OPTIONS EXCHANGE,

INCORPORATED

By: ________________________________

Its: ________________________________

Dated:______________________________

C2 OPTIONS EXCHANGE, INCORPORATED

By: _________________________________

Its: _________________________________

Dated:_______________________________

Exhibit 10.11

EMPLOYMENT AGREEMENT

WITNESSETH:

WHEREAS , on September 25, 2016, Holdings entered into an Agreement and Plan of Merger (the “ Merger Agreement ”) with Bats Global Markets, Inc. (“ Bats ”) pursuant to which a wholly owned subsidiary of Holdings will merge with and into Bats, causing Bats to become a wholly owned subsidiary of Holdings (such transaction, the “ Merger ”);

WHEREAS , Employee is currently employed as Chief Executive Officer of Bats pursuant to his Employment Agreement with Bats dated as of December 17, 2015 (the “ Bats Agreement ”);

WHEREAS , Employer desires that Employee enter into this Agreement to provide services for the benefit of Employer and its affiliates commencing upon the consummation of the Merger (the “ Closing ,” and such date that the Closing occurs, the “ Effective Date ”), and Employee desires to enter into employment with Employer as of the Effective Date;

WHEREAS , Employee acknowledges that, effective upon Closing, the Bats Agreement shall be terminated and that, subject to any accrued but unpaid obligations of Bats as of the Effective Date, Employee shall have no continuing rights or obligations thereunder, and any and all rights and obligations of the parties shall be governed by this Agreement;

WHEREAS , Employer and Employee acknowledge that, effective upon Closing, Employee’s employment under this Agreement shall become effective, and Employee will be a member of the senior management team of Employer and, as such, will participate in implementing Employer’s business plan;

WHEREAS , in the course of employment with Employer, Employee will have access to certain Secret or Confidential Information (as defined herein) that relates to or will relate to the business of Employer and its affiliates; and

WHEREAS , Employer desires that any such information not be disclosed to other parties or otherwise used for unauthorized purposes.

1. Employment .

(a) During the Term (as defined below), Employer shall employ Employee as its President and Chief Operating Officer, with the role and authority commensurate with such position, and Employee shall perform such duties consistent with such position that may be assigned to him from

time to time by the Chief Executive Officer, including responsibility for the equity, options and foreign exchange businesses; business development; technology and enterprise systems; and marketing.

(b) Employee agrees to devote his full business time and efforts to the affairs of Employer and to the performance of his duties as its President and Chief Operating Officer. In doing so, Employee agrees to conduct himself at all times in a manner consistent with the excellent reputation of Employer.

(c) Employee agrees not to accept any membership on the board of directors of any other private or public corporation (other than CBOE affiliates) without the prior written approval of the Chief Executive Officer of Employer. The Chief Executive Officer will grant such approval if, in the Chief Executive Officer’s discretion, such membership will present no conflict of interest or interference with Employee’s duties as President and Chief Operating Officer.

3. Compensation. Employer shall pay to Employee the following for all services to be performed by Employee during the Term:

(a) A base salary (“ Base Salary ”) at the rate of $1,000,000 per annum. Base Salary shall be payable in substantially equal regular installments in accordance with Employer’s practices for other senior executives, as such practices may be determined from time to time. The Compensation Committee (the “ Committee ”) of the Board of Directors of Holdings (the “ Board ”) shall review the rate of Base Salary in such manner and at such time as is applicable to other senior executives, with any revised rate of salary to become the “Base Salary” for all purposes of this Agreement. In no event shall Employee’s Base Salary be decreased below the Base Salary in effect as of the Effective Date.

(b) In addition to the aforementioned annual Base Salary, Employee shall be eligible to participate in any bonus or incentive program applicable to other senior executives of Employer during the Term. Employee’s initial target annual bonus or incentive payment shall be $1,500,000, which shall be prorated for the partial calendar year commencing on the Effective Date. Any bonus or incentive payment for a fiscal year of Employer shall be payable to Employee as soon as practicable after the end of such year, and in no event later than March 15 of the year immediately following the year in which it was earned.

(i) Employee shall be eligible to receive equity incentive awards under the LTIP in amounts and subject to such terms as determined by the Committee in its sole discretion, provided that Employee’s initial target annual equity incentive compensation award to be granted as of the first annual grant date to occur following the Effective Date shall have a grant date value of $2,000,000. The vesting terms relating to such awards, including the terms that apply in connection with a Change in Control, shall be no less favorable than those that apply to other senior executives of Employer.

(ii) Effective as of the Effective Date, the Committee will make a special award to Employee of restricted stock units under the LTIP with a grant date value of $2,000,000 (the “ Special RSU Award ”). Subject to accelerated vesting as described in Sections 5 and 8 hereof, the Special RSU Award shall vest in full upon the third anniversary of the Effective Date, provided that Employee remain in continuous employment with Employer through such date and subject to the terms and conditions contained in the LTIP and the award agreement thereunder.

4. Additional Benefits .

(a) Business Expenses . Employer will pay or promptly reimburse Employee for all reasonable business expenses incurred by Employee in the performance of his duties during the Term. All amounts subject to reimbursement by Employer to Employee pursuant to this paragraph (a) shall be subject to an accounting by Employee and approval by Employer. Employer also shall pay for all fees and expenses of Employee’s legal and other professional advisors in connection with the negotiation of the terms of this Agreement, in an amount not to exceed $15,000.

(b) Benefit Plans. During the Term, Employee shall be entitled to participate in, and receive benefits under, (i) any qualified or supplemental retirement, savings or deferred compensation plan, program or arrangement currently made available by Employer for senior executives (other than the Chicago Board Options Exchange, Incorporated Executive Retirement Plan, which has been frozen to new participants), and (ii) any such additional or substitute plan, program or arrangement that Employer may make available in the future and during the Term for similarly situated senior executives (“ Benefit Plans ”), subject to and on a basis consistent with the terms, conditions and overall administration of each such Benefit Plan.

(c) Vacations, Holidays, and Other Perquisites and Fringe Benefits. Employee shall be entitled to vacations, holidays and other perquisites and fringe benefits that are enjoyed by similarly situated personnel, provided that Employee will be entitled to the foregoing at a level commensurate with an executive in Employee’s position who has been employed by Employer for ten years; provided that such benefits shall in no event be less favorable than those enjoyed by Employee as Chief Executive Officer of Bats immediately prior to the execution of the Merger Agreement and set forth in the Bats Agreement. For the avoidance of doubt, Employee shall not be entitled to participate in the Chicago Board Options Exchange, Incorporated Executive Retirement Plan or any other benefit plan, perquisite or fringe benefit that has been frozen to new participants as of the Effective Date.

5. Termination. Upon the termination of Employee’s employment for any reason, Employee shall be deemed to have resigned as of the date of Employee’s termination of employment from all offices, directorships and fiduciary positions with Employer, its affiliates and employee benefit plans unless Employee is affirmatively re-appointed or re-elected to such position as of the date of Employee’s termination of employment.

(a) Termination For Cause. Employer may terminate the employment of Employee at any time during the Term for “Cause.” For purposes of this Agreement, “ Cause ” shall be deemed to exist if, and only if:

(ii) Employee shall intentionally disobey or disregard a lawful and proper direction of the Board, Chief Executive Officer or Employer, or refuse to perform his duties and responsibilities under this Agreement; provided that in each case (a) Employer has notified Employee in writing that the direction, duty or responsibility is one that, if not complied with, would constitute a “Cause” event under this Agreement, and (b) Employee does not cure the conduct within thirty (30) days following receipt by Employee of such written notification from Employer;

(iii) Employee shall materially breach this Agreement, and such breach, by its nature, is incapable of being cured, or such breach remains uncured for more than thirty (30) days following receipt by Employee of written notice from Employer specifying the nature of the breach and demanding the cure thereof. For purposes of this clause (iii), a material breach of this Agreement that involves inattention by Employee to his duties under this Agreement shall be deemed a breach capable of cure; or

(iv) Employee shall commit willful misconduct in connection with the performance of his duties, provided that Employer first gives Employee written notice of its intention to terminate and the grounds for such termination within ninety (90) days following the date Employer is informed of such grounds and Employee has not, within thirty (30) days following receipt of such notice, cured such misconduct (if capable of cure) in a manner that is reasonably satisfactory to Employer.

Employer, and Employee has no reasonable cause to believe his conduct was unlawful. In addition, Employee’s employment shall be deemed to have terminated for Cause if, after Employee’s employment has terminated, facts and circumstances are discovered that would have justified a termination for Cause under Section 5(a) above.

Notwithstanding anything herein to the contrary, if Employer shall terminate the employment of Employee hereunder for Cause, Employer shall give at least thirty (30) days prior written notice to Employee specifying in detail the reason or reasons for Employee's termination. If the employment of Employee is terminated by Employer for Cause, Employee's accrued but unpaid Base Salary (based upon the annual rate in effect on the date of termination) shall be paid to Employee through the date of his termination, and, except as otherwise provided in Section 24 of this Agreement and in any Benefit Plan or Insurance Plan, Employer shall have no further obligation, including any obligation for Severance Benefits (as defined herein), to Employee under this Agreement. Such termination shall have no effect upon Employee’s rights under the Benefit Plans, the Insurance Plans and other employee policies and practices of Employer applicable to such termination.

(b) Termination Without Cause. Employer may terminate the employment of Employee without Cause, at any time during the Term, as of a date at least thirty (30) days after the date a written notice of such termination is delivered by Employer to Employee. In such event, Employer shall, subject to the terms of Section 12 and Section 21 of this Agreement, pay or otherwise provide to Employee:

(i) Employee’s accrued but unpaid Base Salary (based upon the annual rate in effect on the date of termination) through the date of termination, to be paid within thirty (30) days of termination;

(iii) A lump sum cash severance payment (the “ Severance Payment ”) in an amount equal to:

(1) If termination of Employee’s employment occurs within the twenty-four (24) month period immediately following the Effective Date, the sum of (A) two (2) times Employee’s annual rate of Base Salary in effect on the date of termination and (B) two (2) times the target bonus for the year in which Employee’s employment is terminated, to be paid within thirty (30) days of termination;

(2) If termination of Employee’s employment occurs after the twenty-four (24) month period immediately following the Effective Date, the sum of (A) one (1) times Employee’s annual rate of Base Salary in effect on the date of termination and (B) one (1) times the target bonus for the year in which Employee’s employment is terminated, to be paid within thirty (30) days of termination;

(iv) A lump sum cash payment (the “ Benefit Plan Payment ”) in an amount equal to:

(1) If termination of Employee’s employment occurs within the twenty-four (24) month period immediately following the Effective Date, the aggregate amount of all Employer contributions that Employee or his account would have received had his employment continued for a period equal to two (2) years under the following Benefit Plans: (A) Chicago Board Options Exchange SMART Plan; and (B) Chicago Board Options Exchange, Incorporated Supplemental Retirement Plan, or in each case any successor plan, to be paid within thirty (30) days of termination;

(2) If termination of Employee’s employment occurs after the twenty-four (24) month period immediately following the Effective Date, the aggregate amount of all Employer contributions that Employee or his account would have received had his employment continued for a period equal to one (1) year under the following Benefit Plans: (A) Chicago Board Options Exchange SMART Plan; and (B) Chicago Board Options Exchange, Incorporated Supplemental Retirement Plan, or in each case any successor plan, to be paid within thirty (30) days of termination;

(v) Accelerated vesting of all outstanding equity awards granted by Bats prior to the consummation of the Merger and assumed by Holdings in the Merger, to the extent held by Employee as of the date of termination of employment (the “ Bats Equity Acceleration ”);

(vi) Accelerated vesting of any unvested portion of the Special RSU Award (the “ Special RSU Acceleration ”); and

(vii) Provided that Employee timely elects the continuation of coverage to which Employee and Employee’s spouse and dependents would be entitled under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“ COBRA ”), Employer shall also pay Employee’s COBRA premiums (or an amount equal to Employee’s COBRA premiums) (sufficient to cover full family health care) for a period of either: (A) eighteen (18) months following the termination of Employee’s employment, if the termination of employment occurs within the twenty-four (24) month period immediately following the Effective Date; or (B) twelve months following the termination of Employee’s employment, if the termination of employment occurs after the twenty-four (24) month period immediately following the Effective Date.

The foregoing notwithstanding, Employer’s obligation to pay the COBRA premiums described in Section 5(b)(vii) above (collectively, the “ Insurance Premiums ”) shall cease on the date Employee becomes eligible for comparable coverage under another group health plan that does not impose pre-existing condition limitations on Employee’s coverage. Nothing herein shall be construed to extend the period of time over which COBRA continuation coverage may be provided to Employee or his dependents beyond that mandated by law. The Pro-Rated Bonus, Severance Payment, Benefit Plan Payment, Bats Equity Acceleration, Special RSU Acceleration and Insurance Premiums described in this Section 5(b) shall be referred to herein collectively as the “ Severance Benefits .” Except as otherwise provided in this Section 5(b), in Section 24 of this Agreement, and in any Benefit Plan or Insurance Plan of Employer, Employer shall have no further obligation to Employee under this Agreement following the date his employment is terminated without Cause.

(c) Termination for Good Reason. Employee may terminate his employment at any time during the Term for Good Reason as of a date at least thirty (30) days after the date a written notice of such termination is delivered by Employee to Employer but within two (2) years after the initial existence of the condition constituting Good Reason, unless the condition constituting Good Reason is fully corrected within thirty (30) days after Employee gives Employer written notice thereof. For purposes of this Agreement, “ Good Reason ” shall be deemed to exist if, and only if, without Employee's express written consent, Employer or a successor employer:

(i) shall assign to Employee authorities (including officer titles), duties or responsibilities that are inconsistent in any material and adverse respect with Employee’s authorities, duties or responsibilities with Employer as contemplated by this Agreement (including any material and adverse diminution of such authorities, duties or responsibilities);

(ii) shall materially reduce the base compensation of Employee;

(iii) shall require Employee to relocate his principal business office to a location other than the Chicago or New York metropolitan areas, or assign to Employee duties that would reasonably require such relocation;

(iv) shall terminate, reduce or limit Employee’s participation in any bonus, target bonus or incentive arrangement relative to the level of participation of other senior executives of similar rank, based upon an arbitrary decision of Employer rather than a decision reasonably related to the level of job performance of Employee; provided, however, that such action with respect to Employee’s participation shall only constitute Good Reason under this Agreement if the action results in materially reducing the aggregate value of Employee’s incentive compensation below the aggregate value as of the Effective Date; or

(v) shall materially breach any of the terms of this Agreement.

A termination of Employee’s employment for Good Reason shall be effectuated by giving Employer written notice of the termination within ninety (90) days of the date Employee knew or should have known that the event constituted Good Reason, setting forth in reasonable detail the specific conduct of Employer that constitutes Good Reason and the specific provisions of this Agreement on which Employee relies. Notwithstanding anything herein to the contrary, if Employee shall terminate his employment for Good Reason, Employer shall pay to Employee his accrued but unpaid Base Salary (based upon the annual rate in effect on the date of termination or the date immediately prior to Employer's actions described in subsections (ii) and (iv) above, whichever is greater) through the date of termination and the Severance Benefits on the same terms and subject to the same conditions as described in Section 5(b) hereof. Except as otherwise provided in this Section 5(c), in Section 24 of this Agreement, and in any Benefit Plan or Insurance Plan of Employer, Employer shall have no further obligation to Employee under this Agreement following the date he terminates his employment for Good Reason.

unpaid Base Salary (based upon the annual rate in effect on the date of termination) shall be paid to Employee through the date of his termination, and, except as otherwise provided in Section 24 of this Agreement or in any Benefit Plan or Insurance Plan, Employer shall have no further obligation, including any obligation for Severance Benefits, to Employee under this Agreement. Such termination shall have no effect upon Employee’s rights under the Benefit Plans, the Insurance Plans and other employee policies and practices of Employer applicable to such termination.

6. Death. If Employee’s employment is terminated during the Term by reason of Employee’s death, Employee’s estate shall receive (i) Employee’s Base Salary (based on the annual rate in effect on the date of death) through the date of death, (ii) the Pro-Rated Bonus (payable in accordance with Section 5(b)(ii) hereof) and (iii) the Bats Equity Acceleration. Any benefits payable under this Section 6 are in addition to any other benefits due to Employee’s beneficiaries or dependents from Employer, under any Benefit Plan or Insurance Plan. Except as otherwise provided in this Section 6, in Section 24 of this Agreement, or in any Benefit Plan or Insurance Plan, Employer shall have no further obligations with respect to Employee or his beneficiaries or dependents under this Agreement following the date of his death.

7. Disability .

(a) If Employee is Permanently Disabled for a continuous period of six (6) months during the Term, Employer may terminate Employee’s employment under this Agreement upon thirty (30) days prior written notice to Employee. In such event, Employee shall receive (i) his accrued but unpaid Base Salary (based on the annual rate in effect on the date of termination) through the date of termination, (ii) the Pro-Rated Bonus (payable in accordance with Section 5(b)(ii) hereof) and (iii) the Bats Equity Acceleration.

8. Change in Control .

(i) Employee’s accrued but unpaid Base Salary (based upon the annual rate in effect on the date of termination) through the date of termination;

(ii) The Pro-Rated Bonus;

(iii) A lump sum cash severance payment in an amount equal to the sum of (A) two (2) times Employee’s annual rate of Base Salary in effect on the date of termination and (B) two (2) times the target bonus established by the Committee for the year in which Employee’s employment is terminated, to be paid within thirty (30) days of termination;

(iv) A lump sum cash payment in an amount equal to the aggregate amount of all Employer contributions that Employee or his account would have received had his employment continued for a period equal to two (2) years under the following Benefit Plans: (A) Chicago Board Options Exchange SMART Plan; and (B) Chicago Board Options Exchange, Incorporated Supplemental Retirement Plan, or in each case any successor plan, to be paid within thirty (30) days of termination;

(v) The Bats Equity Acceleration;

(vi) The Special RSU Acceleration; and

(vii) The Insurance Premiums (for a period of eighteen (18) months).

Except as indicated above, the Sale Payment shall be payable on the same terms and subject to the same conditions as described in Section 5(b) of this Agreement for the Pro-Rated Bonus, Bats Equity Acceleration, Special RSU Acceleration and Insurance Premiums. For purposes of this Agreement, a “ Change in Control ” means the first to occur of the following:

i. The acquisition by any “person” as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 (a “ Person ”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934) of voting securities of Holdings or any successor thereto (the “ Corporation ”) where such acquisition causes such Person to own 35% or more of the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the “ Outstanding Voting Securities ”); provided that for purposes of this paragraph (i), the following acquisitions will not be deemed to result in a Change in Control: (w) any acquisition directly from the Corporation, (x) any acquisition by the Corporation, (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any affiliate of the Corporation or (z) any acquisition by any corporation or entity pursuant to a transaction that complies with clauses (A), (B) and (C) of paragraph (iii) of this definition below; and provided further that if any Person’s beneficial ownership of the Outstanding Voting Securities reaches or exceeds 50% as a result of a transaction described in clause (w) or (x) above, and such Person subsequently acquires beneficial ownership of additional voting securities of the Corporation, such subsequent acquisition will be treated as an acquisition that causes such Person to own 35% or more of the Outstanding Voting Securities;

ii. Individuals who, as of the day after the Effective Date, constitute the Board (the “ Incumbent Board ”) cease for any reason to constitute at least a majority of the Board, provided that any individual becoming a director subsequent to the day after the Effective Date whose election, or nomination for election by the Corporation’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board

will be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

iii. The approval by the stockholders of the Corporation and consummation of (x) a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of the Corporation or (y) the acquisition of assets or stock of another corporation in exchange for voting securities of the Corporation (each of (x) and (y), a “ Business Combination ”); excluding, however, such a Business Combination pursuant to which (A) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that as a result of such transaction owns the Corporation or all or substantially all of the Corporation’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Voting Securities, (B) no Person (excluding any employee benefit plan (or related trust) of the Corporation or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly (except to the extent that such ownership existed prior to the Business Combination), an amount of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation representing 20% thereof; and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

iv. Approval by the stockholders of the Corporation of a complete liquidation or dissolution of the Corporation.

(b) Excess Parachute Payments .

the after-tax value of an amount shall be determined taking into account all federal, state, and local income, employment, and excise taxes applicable to such amount. In making any determination as to whether the Total Payments would be subject to an Excise Tax, consideration shall be given to whether any portion of the Total Payments could reasonably be considered, based on the relevant facts and circumstances, to be reasonable compensation for services rendered (whether before or after the consummation of the applicable Change in Control). To the extent Total Payments must be reduced pursuant to this Section, Employer, without consulting Employee, will reduce the Total Payments to achieve the best economic benefit to Employee, and to the extent economically equivalent, on a pro-rata basis.

payment of costs and expenses. Without limitation on the foregoing provisions of this subparagraph (iii), Employer, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such Claim and may, at its sole option, either direct Employee to pay the tax claimed and sue for a refund or contest the Claim in any permissible manner, and Employee agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as Employer shall determine, provided, however, that if Employer directs Employee to pay such Claim and sue for a refund, Employer shall advance the amount of such payment to Employee on an interest-free basis or, if such an advance is not permissible thereunder, pay the amount of such payment to Employee as additional compensation, and shall indemnify and hold Employee harmless, on an after-tax basis, from any Excise Tax, additional Excise Tax, or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or additional compensation; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of Employee with respect to which such contested amount is claimed to be due is limited solely to such contested amount.

(iv) Refund . If, after the receipt by Employee of an amount advanced or paid by Employer pursuant to paragraph (iii) above, Employee becomes entitled to receive any refund with respect to such Claim, Employee shall (subject to Employer’s complying with the requirements of subparagraph (iii)) promptly pay to Employer the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Employee of an amount advanced by Employer pursuant to paragraph (iii), a determination is made that Employee shall not be entitled to any refund with respect to such Claim and Employer does not notify Employee in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid.

9. Restrictive Covenants. For purposes of this Section 9 and Section 10, each reference to “Employer” includes Employer and its affiliates (including, but not limited to, Holdings, CBOE and C2). Employee understands the global nature of Employer’s businesses and the effort Employer undertakes to develop and protect its business and its competitive advantage. Accordingly, Employee agrees that the scope and duration of the restrictions described in this Agreement are reasonable and necessary to protect the legitimate business interests of Employer. Employee further agrees that during the period of his employment and for a period of two years following a termination of Employee’s employment pursuant to Section 5(a), 5(b), 5(c), 5(d), 7 or 8 hereof, Employee shall not:

(a) singly, jointly, or in any other capacity, in a manner that contributes to any research, technology, development, account, trading, marketing, promotion, or sales and that relates to Employee’s service with Employer, directly or beneficially, manage, join, participate in the management, operation or control of, or work for (as an employee, consultant or independent contractor), or permit the use of his name by, or provide financial or other assistance to, or be connected in any manner with, any options exchange or alternative trading system that directly competes with Employer, without the express written approval of the Chief Executive Officer;

(c) solicit or accept if offered to him, with or without solicitation, on his own behalf or on behalf of any other person, the services of any person who is a then current employee of Employer (or was an employee of Employer during the year preceding such solicitation), nor solicit any of Employer’s then current employees (or an individual who was employed by or engaged by Employer during the year preceding such solicitation) to terminate employment or an engagement with Employer, nor agree to hire any then current employee (or an individual who was an employee of Employer during the year preceding such hire) of Employer into employment with himself or any company, individual or other entity; or

10. Confidentiality.

(a) Employee acknowledges that Employer will disclose Secret or Confidential Information to Employee during the Term to enable him to perform his duties hereunder. Employee agrees that, subject to the following sentence, he shall not during the Term (except in connection with the proper performance of his duties hereunder) and thereafter, without the prior written consent of Employer, disclose to any person or entity any material or significant Secret or Confidential Information concerning the business of Employer that was obtained by Employee in the course of his employment by Employer. This paragraph shall not be applicable if and to the extent Employee 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 Employee by any law, regulation or order of any court or regulatory commission, department or agency. Employee further agrees that if his employment by Employer is terminated for any reason, he will not take with him, but will leave with Employer, all records and papers and all matter of whatever nature that bears Secret or Confidential Information of Employer. 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, Employer’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 Employer, that has not been published or disclosed to the general public, the options industry or the commodities futures industry; provided, however, that such term shall not include knowledge, skills, and information that is common to the trade or profession of Employee.

12. Release. Notwithstanding anything herein to the contrary, as a condition to receiving any severance payments or benefits under this Agreement, Employee agrees to execute a release of claims (in a form substantially similar to the form set forth in Exhibit A, which is attached hereto and made a part hereof) (the “ Release ”). Employee must deliver to Employer an original, signed Release and the revocability period (if any) must elapse by the Release Deadline. For purposes of this Section, the “ Release Deadline ” means the date that is sixty (60) calendar days after Employee’s termination of employment. No severance payments or benefits under this Agreement shall be made or provided prior to the date that both (i) Employee has delivered an original, signed Release to Employer and (ii) the revocability period (if any) has elapsed. Payment of any severance payments or benefits that are not exempt from Section 409A of the Code shall be delayed until the Release Deadline, irrespective of when Employee executes the Release; provided, however, that where Employee’s termination of employment and the Release Deadline occur within the same calendar year, the payment may be made up to thirty (30) days prior to the Release Deadline, and provided further that where Employee’s termination of employment and the Release Deadline occur in two separate calendar years, payment may not be made before the later of January 1 of the second year or the date that is thirty (30) days prior to the Release Deadline. If Employee does not deliver an original, signed Release to Employer by the Release Deadline, (i) Employee’s rights shall be limited to those made available to Employee as if Employee were terminated under Section 5(d) above, and (ii) Employer shall otherwise have no obligation to pay or provide to Employee any severance payments or benefits described in this Agreement, or any other monies on account of the termination of Employee’s employment.

13. Assignment. Neither Employee nor Employer may assign this Agreement, except that Employer’s obligations hereunder shall be binding legal obligations of any successor to all or substantially all of Employer's business by purchase, merger, consolidation, or otherwise.

18. Entire Agreement. This Agreement contains the entire agreement between Employer and Employee, and supersedes any and all other previous agreements, written or oral, between the parties relating to the subject matter hereof, including, without limitation, the Offer Letter Agreement between CBOE and Employee, dated September 25, 2016, and the Bats Agreement. No amendment or modification of the terms of this Agreement shall be binding upon either of the parties hereto unless reduced to writing and signed by each of the parties hereto.

19. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.

economic results as were intended under this Agreement. Employer cannot guarantee that the payments and benefits that may be paid or provided pursuant to this Agreement will satisfy all applicable provisions of Section 409A of the Code. Notwithstanding any provision of this Agreement to the contrary, any compensation or benefit payable under this Agreement that constitutes a deferral of compensation under Section 409A of the Code shall be subject to the following:

(b) No compensation or benefit that is subject to the requirements of Section 409A of the Code and that is payable upon Employee's termination of employment shall be paid unless Employee's termination of employment constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h), and references in this Agreement to “termination,” “termination of employment” or like terms shall mean a “separation from service.”

(c) If Employee is deemed at the time of his separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the compensation or benefits to which Employee is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code (any such delayed commencement, a “ Payment Delay ”), such compensation or benefits shall be provided to Employee on the earlier to occur of (1) the date that is six (6) months and one day from the date of Employee’s “separation from service” with Employer or (2) Employee’s death. Upon the earlier of such dates, all payments and benefits deferred pursuant to the Payment Delay shall be paid in a lump sum to Employee, and any remaining compensation and benefits due under the Agreement shall be paid or provided as otherwise set forth herein. The determination of whether Employee is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his separation from service shall be made by Employer in accordance with the terms of Section 409A of the Code.

(f) The payment of any compensation or benefit that is subject to the requirements of Section 409A of the Code may not be accelerated except to the extent permitted by Section 409A of the Code.

(g) The payment of any tax gross-up payment will be made by the end of Employee’s taxable year next following Employee’s taxable year in which he remits the related taxes. Reimbursement of expenses incurred by Employee due to a tax audit or litigation addressing the existence or amount of a tax liability will be made by the end of Employee’s taxable year following Employee’s taxable year in which the taxes that are the subject of the audit or litigation are remitted to the taxing authority, or where as a result of such audit or litigation no taxes are remitted, the end of Employee’s taxable year following Employee’s taxable year in which the audit is completed or there is a final and nonappealable settlement or other resolution of the litigation.

22. Successors. This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, representatives and successors.

If to Employer:

Chicago Board Options Exchange, Incorporated

400 S. LaSalle Street

Chicago, Illinois 60605

Attention: Chief Human Resources Officer

If to Employee:

At the most recent address on file with the Company

24. Indemnity . Holdings, CBOE and C2 shall indemnify, protect, defend and save Employee harmless from and against any threatened, pending, contemplated or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, in which Employee is made a party by reason of the fact that Employee is or was an officer, employee or agent of Employer, or any judgment, amount paid in settlement (with the consent of Employer), fine, loss, expense, cost, damage and reasonable attorneys’ fees incurred by reason of the fact that Employee is or was an officer, employee or agent of Employer; provided, however, that Employee acted in good faith and in a manner he reasonably believed to be in the best interests of Employer, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Employer, at its expense, shall have the right to purchase and maintain insurance or fidelity bonds on behalf of Employee against any liability asserted against him and incurred by him in his capacity as an officer, employee, or agent of Employer. Employee shall also be indemnified under the Certificate of Incorporation and By-Laws of Holdings, CBOE or C2, and covered by directors’ and officers’ liability insurance policies that are the same as or equivalent to those Holdings, CBOE or C2 currently carries for its or their other executives.

26. Headings. The headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of any provision of this Agreement.

IN WITNESS WHEREOF , Employee has hereunto set his hand, and Employer has caused these presents to be executed in its name on its behalf, all as of the date first above written.

/s/ Christopher Concannon 2/27/2017

Christopher Concannon Date

CBOE Holdings, Inc.

By: /s/ Edward T. Tilly

Title: Chief Executive Officer, Edward T. Tilly

Dated: 2/27/2017

Chicago Board Options Exchange, Incorporated

By: /s/ Edward T. Tilly

Title: Chief Executive Officer, Edward T. Tilly

Dated: 2/27/2017

C2 Options Exchange, Incorporated

By: /s/ Edward T. Tilly

Title: Chief Executive Officer, Edward T. Tilly

Dated: 2/27/2017

Exhibit A

RELEASE OF CLAIMS

THIS RELEASE OF CLAIMS (“ Release ”) is made and entered into this _______ day of _____________20__, to be effective as of ___________________ (the “ Effective Date ”), by and between CBOE HOLDINGS, INC. (“ Holdings ”), CHICAGO BOARD OPTIONS EXCHANGE, INCORPORATED (“ CBOE ”), C2 OPTIONS EXCHANGE, INCORPORATED (“ C2 ” and, unless indicated otherwise, referred to herein together with Holdings and CBOE as “ Employer ”) and CHRISTOPHER CONCANNON, a resident of the State of New York and with principal office located in Chicago, Illinois (“ Concannon ”)

1. In consideration of Employer’s payment to Concannon of the severance pay and benefits described in the Employment Agreement by and between Employer and Concannon (the “ Employment Agreement ”), to which Concannon is not otherwise entitled and the sufficiency of which Concannon acknowledges, Concannon does hereby fully, finally and unconditionally release and forever discharge Employer, Employer’s subsidiaries and affiliates, and the former and current officers, directors, employees, members, representatives and agents and all of their respective predecessors, successors, and assigns of Employer and Employer’s subsidiaries and affiliates (collectively “ Released Parties ”), in their personal, corporate and representative capacities, from any and all rights, claims, liabilities, obligations, damages, costs, expenses, attorneys’ fees, suits, actions, and demands, of any and every kind, nature and character, known or unknown, liquidated or unliquidated, absolute or contingent, in law and in equity, enforceable or arising under any local, state or federal common law, statute or ordinance relating to Concannon’s past employment with Employer or any past actions, statements, or omissions of Employer or any of the Released Parties occurring prior to Concannon’s execution of this Release, including but not limited to all claims for defamation, wrongful termination, back pay and benefits, pain and suffering, negligent or intentional infliction of emotional distress, breach of contract, and interference with contractual relations, tort claims, employment discrimination claims, and all claims arising under the Age Discrimination in Employment Act of 1967, as amended (“ ADEA ”), Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1866, as amended by the Civil Rights Act of 1991 (42 U.S.C. § 1981), the Family and Medical Leave Act, the Equal Pay Act, the Fair Labor Standards Act, the Americans with Disabilities Act, the Older Workers Benefit Protection Act, the Illinois Human Rights Act, the Workers Adjustment and Retraining Act, and the Chicago and Cook County Human Rights Ordinances, and any other statutory, contract, implied contract, or common law claim arising out of or involving Concannon’s employment, the termination of Concannon’s employment, or any continuing effects of Concannon’s employment with Employer.

2. Concannon agrees not to sue Employer or any of the Released Parties with respect to rights and claims covered by this Release. If any government agency or court assumes jurisdiction of any charge, complaint, or cause of action covered by this Release, Concannon will not seek and will not accept any personal equitable or monetary relief in connection with such investigation, action, suit, or legal proceeding.

3. Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement prohibits Concannon from confidentially or otherwise communicating or filing a charge or complaint with a governmental or regulatory entity, participating in a governmental or regulatory entity investigation, or giving truthful testimony or making other disclosures to a governmental or regulatory entity (in each case, without having to disclose any such conduct to Employer), or from responding if properly subpoenaed or otherwise required to do so under applicable law. In addition, nothing in this Agreement limits Concannon’s right to receive an award from a governmental or regulatory entity for information provided to such an entity (and not as compensation for actual or alleged personal injury or damages to Concannon).

4. Concannon has twenty-one (21) days (until _______________, 20___) within which to consider this Release, although Concannon may accept it at any time within those twenty-one (21) days. Once Concannon has signed this Release, Concannon will still have seven (7) days in which to revoke his acceptance of the ADEA portion of the Release by notifying Employer, and specifically its Chief Human Resources Officer. The ADEA portion of the Release will not be effective or enforceable until the seven (7) day revocation period has expired. If the ADEA portion of the Release is revoked, the remainder of this Release shall remain in full force and effect as to all of its terms except for the release of claims under the ADEA, and Employer will have three (3) business days to rescind the entire Release by so notifying Concannon.

5. Concannon agrees that he will continue to be governed by those obligations arising under Sections 9, 10 and 11 of the Employment Agreement, which are incorporated by reference herein, shall not be released, shall be unaffected hereby, and shall remain in full force and effect.

6. This Release shall be binding upon and inure to the benefit of Employer and its successors and assigns and Concannon and his heirs, executors and administrators.

7. This Release shall be construed and interpreted under the laws of the State of Illinois to the extent not preempted by applicable laws of the United States.

Christopher Concannon Dated:

CBOE HOLDINGS, INC.

By: Edward T. Tilly

Its: Chief Executive Officer

Dated:_______________________________

CHICAGO BOARD OPTIONS EXCHANGE,

INCORPORATED

By: Edward T. Tilly

Its: Chief Executive Officer

Dated:

C2 OPTIONS EXCHANGE, INCORPORATED

By: Edward T. Tilly

Its: Chief Executive Officer

Dated:_______________________________

Exhibit 10.12

[CBOE LETTERHEAD]

September 25, 2016

Dear Mr. Isaacson:

As you are well aware, our two companies have been in discussions about a possible strategic merger for some months now. It is important to our board that, before CBOE Holdings, Inc. (“CBOE”) enters into a definitive merger agreement, we have reasonable assurance of your commitment to be part of the management team of the combined company going forward. Because the shareholders of your company will, in the aggregate, hold approximately 28% of the combined company, your on-going role with the combined company is a matter of interest to the Bats Global Markets, Inc. (“Bats”) board as well.

With the permission of the Bats board, we have previously discussed your possible role, but have provided no specifics about compensation or certain other matters. Now that the two companies have reached an agreement in principle with respect to price, form of consideration and virtually all contract provisions that are pertinent to the shareholders of Bats, your board has consented to our sharing with you those specifics.

The purpose of this letter is to provide those specifics and, before Bats enters into the definitive merger agreement, to obtain a confirmation of your commitment to be part of the management team of the combined company post-closing.

A. OUR PROPOSAL TO YOU

1. Upon the closing of the proposed transaction, you will be appointed EVP, Chief Information Officer and have responsibility for systems development and operations. Your principal office location will be Lenexa, KS. You will be a member of the Senior Management Team.

2. Your initial annual base salary will be $500,000, your initial targeted annual bonus will be $700,000 and your initial targeted equity incentive compensation will have a grant date value of $500,000. In addition, you will be eligible to receive a Trading Platform Incentive Bonus of up to $1,500,000 upon successful completion of certain milestones, as described in Appendix A hereto.

3. In consideration of your agreements described below, after the closing of the transaction, CBOE will grant you an award of time-vested restricted stock units having a grant date value of $500,000 (the “Award”). The Award will vest in full on the third anniversary of the closing of the transaction, provided that you remain in continuous employment with the combined company through that date and subject to the terms and conditions contained in the Long-Term Incentive Plan (the “Plan”); provided, however, that the Award will become immediately vested if your employment terminates prior to such

Chris Isaacson

Continued Employment Offer

Page 2

third anniversary due to either a termination by CBOE without Cause or a resignation by you for Good Reason, as such terms are defined in your Employment Agreement (as modified by B.1, below). A copy of the Plan is attached as Exhibit A to this letter.

4. It is contemplated in the proposed merger agreement that upon the closing of the transaction, CBOE will assume all of your unvested Bats equity awards in a manner that preserves their closing date value, as well as the applicable vesting and other material terms.

5. As a senior executive of the company, you will be entitled to participation in our 401(k) and related supplemental retirement plan, as well as our medical, life insurance and disability benefit plans that are enjoyed by similarly situated personnel. A description of those benefits as currently in effect is attached as Exhibit B to this letter.

6. The company does not generally provide employment agreements to its executives and it is not contemplated that there would be such an agreement with you. Nevertheless, subject to your agreement to the terms of B.1, below, you will continue to be eligible for the severance and other change in control benefits under your Employment Agreement with Bats dated December 17, 2015 (the “Employment Agreement”), including the accelerated vesting of your Bats equity awards assumed in the merger (but not any CBOE awards granted after closing). Upon the expiration of your right to change in control benefits under the Employment Agreement (24 months after the closing of the proposed transaction or such time when the Bats unvested equity is fully vested, whichever is later), you would become eligible for coverage under our executive level severance policy in lieu of any right to severance or other termination-related benefits under the Employment Agreement. A copy of the current policy is attached as Exhibit C to this letter.

B. YOUR COMMITMENTS TO CBOE AND TO THE COMBINED COMPANY

1. You agree not to assert that the transition from your current position with Bats to the proposed position with the combined company as described above would constitute “Good Reason” for purposes of your Employment Agreement. In the event, however, that within 24 months following the closing of the proposed transaction, (i) there were to be a material reduction in title, role or aggregate compensation from that described above in A.1 and A.2, (ii) your principal office location were to be moved more than 50 miles from that shown above or (iii) the Award is not granted as contemplated in A.3, then you will be entitled to assert “Good Reason” as a basis for voluntarily terminating your employment, but you would need to comply with the procedural requirements of your Employment Agreement to do so.

Chris Isaacson

Continued Employment Offer

Page 3

2. As an officer and senior executive of the combined company, you agree to abide by your fiduciary duties to the combined company and its shareholders and to corporate policies in effect from time to time, including obligations as to conflicts of interest and confidentiality. You also agree to comply with the confidentiality, noncompetition, nonsolicitation and nondisparagement obligations in your Employment Agreement with Bats and agree that those obligations will be for the benefit of both CBOE and Bats.

3. You confirm that it is your intention to be a part of the management team of the combined company on a full-time basis for the foreseeable future, it being understood that at any time you would be free to terminate your employment to pursue other opportunities and that, as is the case with any other executive and subject to any rights and obligations under the Employment Agreement or the severance policies referred to in A.6 above, your employment may be terminated by the combined company based upon performance, cause or any other reason.

*****************************

We are excited by the prospect of the strategic combination and of working with you to achieve the bright prospects we all envision for the combined company. If you are in agreement with the foregoing, please sign a copy of this letter in the space provided below and return it to me.

Very truly yours,

CBOE Holdings, Inc.

By /s/ Edward T. Tilly

Edward T. Tilly

AGREED AND ACCEPTED AS OF THE DATE FIRST ABOVE WRITTEN

/s/ Chris Isaacson

Chris Isaacson

Appendix A

Trading Platform Incentive Bonus

You will be eligible to receive a special Trading Platform Incentive Bonus of up to $1,500,000 based on the extent to which you successfully implement the Bats trading platform on the three CBOE exchanges, as set forth below. Within 60 days after the date on which you complete the successful implementation of the Bats trading platform on one of the applicable exchanges to the reasonable satisfaction of the Chief Executive Officer of CBOE and in satisfaction of the time, budget and other metrics set forth in the implementation project plan, you will receive the cash payment corresponding to such exchange, as set forth below; provided that (i) the implementation is completed within three years following the closing date of the proposed transaction and (ii) you remain in continuous employment with CBOE through the date of payment.


1.	CBOE Futures Exchange, LLC $500,000


2.	C2 Options Exchange, Incorporated $500,000


3.	Chicago Board Options Exchange, Incorporated $500,000

The Trading Platform Incentive Bonus shall not be taken into account for purposes of calculating any other CBOE benefit, including any retirement, annual or long-term incentive or severance benefit to which you may become entitled.

Exhibit A

SECOND AMENDED AND RESTATED

CBOE HOLDINGS, INC. LONG-TERM INCENTIVE PLAN

(Amended and Restated Effective February 17, 2016)

CBOE Holdings, Inc. has established this Second Amended and Restated CBOE Holdings, Inc. Long- Term Incentive Plan (second amendment and restatement effective February 17, 2016) to provide an additional inducement for Eligible Individuals to provide services to the Corporation or an Affiliate as an Employee or non-employee Director, to reward such Eligible Individuals by providing an opportunity to acquire incentive awards, and to provide a means through which the Corporation may attract able persons to enter the employment of or engagement with the Corporation or one of its Affiliates. Awards may, in the discretion of the Board or Committee, and subject to such restrictions as the Board or Committee may determine or as provided herein, consist of Non-Qualified Stock Options, Restricted Stock, Restricted Stock Units, Incentive Compensation Awards, or any combination of the foregoing.

ARTICLE 1

DEFINITIONS

Whenever used in the Plan, the following terms have the meanings set forth below, and when the meaning is intended, the initial letter of the word is capitalized:

“Affiliate” means a Person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Corporation. For purposes of the preceding sentence, the word “control” (by itself and as used in the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.

“Award” means a Non-Qualified Stock Option, Restricted Stock, Restricted Stock Unit, or Incentive Compensation award granted under the Plan.

“Award Agreement” means an agreement entered into between the Corporation and the applicable Participant, setting forth the terms and provisions applicable to the Award then being granted under the Plan, as further described in Section 4.2 of the Plan.

“Award Date” means, with respect to any Award, the date of the grant or award specified by the Committee in a resolution or other writing, duly adopted, and as set forth in the Award Agreement, provided that such Award Date will not be earlier than the date of the Committee action.

“Board” means the Board of Directors of the Corporation.

“Cause” has the meaning set forth in any employment, consulting, or other written agreement between the Participant and the Corporation or an Affiliate. If there is no employment, consulting, or other written agreement between the Corporation or an Affiliate and the Participant or if such agreement does not define “Cause,” then “Cause” will have the meaning specified in the Award Agreement, provided that if the Award Agreement does not so specify, “Cause” will mean, as determined by the Committee in its sole discretion and solely with respect to the Plan and any Award made hereunder, the Participant’s (a) willful and continued failure to perform his or her material duties with the Corporation or an Affiliate, or the commission of any activities constituting a violation or breach under any Federal, state, local or non-U.S. law or regulation applicable to the activities of the Corporation or an Affiliate, (b) fraud, breach of fiduciary duty, dishonesty, misappropriation or other action that causes damage to the property or business of the Corporation or an Affiliate, (c) repeated absences from work such that the Participant is unable to perform his or her employment or other duties in all material respects, other than due to becoming Disabled, (d) admission or conviction of, or plea of nolo contendere to, any felony, or any other crime that, in the reasonable judgment of the Board or Committee, adversely affects the Corporation’s or an Affiliate’s reputation or the Participant’s ability to carry out the obligations of his or her employment or Service, (e) loss of any license or registration that is necessary for the Participant to perform his or her duties for the Corporation or an Affiliate, (f) failure to cooperate with the Corporation or an Affiliate in any internal investigation or administrative, regulatory or judicial proceeding or, (g) act or omission in violation or disregard of the Corporation’s or an Affiliate’s policies, including but not limited to the Corporation’s or an Affiliate’s harassment and discrimination policies and standards of conduct then in effect, in such a manner as to cause loss, damage or injury to the property, reputation or employees of the Corporation or an Affiliate. In addition, the Participant’s Service will be deemed to have terminated for Cause if, after the Participant’s Service has terminated, facts and circumstances are discovered that would have justified a termination for Cause. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Corporation or an

Affiliate will be conclusively presumed to be done, or omitted to be done, in good faith and in the best interests of the Corporation or an Affiliate.

“Change in Control” means the first to occur of the following:

(a)

The acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of voting securities of the Corporation where such acquisition causes such Person to own 35% or more of the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the “Outstanding Voting Securities”); provided that for purposes of this paragraph (a), the following acquisitions will not be deemed to result in a Change in Control: (i) any acquisition directly from the Corporation, (ii) any acquisition by the Corporation, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any Affiliate of the Corporation or (iv) any acquisition by any corporation or entity pursuant to a transaction that complies with clauses (A), (B) and (C) of paragraph (c) of this definition below; and provided further that if any Person’s beneficial ownership of the Outstanding Voting Securities reaches or exceeds 50% as a result of a transaction described in clause (i) or (ii) above, and such Person subsequently acquires beneficial ownership of additional voting securities of the Corporation, such subsequent acquisition will be treated as an acquisition that causes such Person to own 35% or more of the Outstanding Voting Securities;

(b)

Individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Corporation’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(c)

The approval by the stockholders of the Corporation and consummation of (i) a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of the Corporation or (ii) the acquisition of assets or stock of another corporation in exchange for voting securities of the Corporation (each of (i) and (ii), a “Business Combination”); excluding, however, such a Business Combination pursuant to which (A) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that as a result of such transaction owns the Corporation or all or substantially all of the Corporation’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Voting Securities, (B) no Person (excluding any employee benefit plan (or related trust) of the Corporation or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly (except to the extent that such ownership existed prior to the Business Combination), an amount of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation representing 20% thereof; and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or


(d)	Approval by the stockholders of the Corporation of a complete liquidation or dissolution of the Corporation.

Notwithstanding the foregoing, (i) unless a majority of the Incumbent Board determines otherwise, no Change in Control will be deemed to have occurred with respect to a particular Participant if the Change in Control results from actions or events in which such Participant is a participant in a capacity other than solely as an Officer, Employee or Director of the Corporation, and (ii) a Public Offering will not constitute a Change in Control .

“Code” means the Internal Revenue Code of 1986, as amended. A reference to any provision of the Code will include reference to any successor provision of the Code.

“Committee” means the Compensation Committee of the Board, if any, or such similar or successor committee appointed by the Board to administer the Plan. If the Board has not appointed a Committee, including the Compensation Committee of the Board, to administer the Plan, the Board will function in place of the Committee as administrator of the Plan and references to the “Committee” herein shall mean and refer to the Board.

“Corporation” means CBOE Holdings, Inc. or any successor corporation thereto.

“Director” means any individual who is a member of the Board on or after the Effective Date.

“Disabled” means the Participant:


(a)	becomes unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months; or


(b)	by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receives income replacement benefits for a period of not less than three months under an accident and health plan of the Corporation or an Affiliate, as applicable.

“Dividend Equivalent Right” means a right to receive, with respect to any dividends or other distributions on a share of Stock underlying a Restricted Stock Unit, dividend equivalents on the share of Stock, as though such share of Stock had been issued and outstanding, fully vested, and held by the Participant on the record date of payment of such dividends. Subject to Section 7.4, Dividend Equivalent Rights may be provided in connection with an Award of Restricted Stock Units under the Plan, but not in connection with an Award of Restricted Stock or Options.

“Effective Date” has the meaning set forth in Section 10.3 of the Plan.

“Eligible Individual” means any Employee or non-employee Director.

“Employee” means any person treated as a common law employee in the records of the Corporation or one of its Affiliates. The Corporation shall determine in good faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee and the effective date of such individual’s employment or termination of employment, as the case may be. For purposes of an individual’s rights, if any, under the terms of the Plan as of the time of the Corporation’s determination of whether or not the individual is an Employee, all such determinations by the Corporation shall be final, binding and conclusive as to such rights, if any, notwithstanding that the Corporation or any court of law or governmental agency subsequently makes a contrary determination as to such individual’s status as an Employee.

“Exchange Act” means the Securities Exchange Act of 1934, as amended. A reference to any provision of the Exchange Act will include reference to any successor provision of the Exchange Act.

“Exercise Price” means the purchase price at which an Option may be exercised, subject to the provisions of Article 5.

“Fair Market Value” means, as of any date:

(a)

if the Stock is readily tradeable on a national or regional securities exchange or market system, or is quoted on the Over the Counter Bulletin Board (OTCBB), the Fair Market Value of a share of Stock will be the sales price at close of the Stock on the Award Date, time of exercise, or other date of calculation (or on the last preceding trading date if Stock was not traded on such date) as quoted on such national or regional securities exchange or market system or the OTCBB (whichever constitutes the primary market for the Stock), as reported by the Consolidated Tape Association, the OTCBB or such other source as the Committee deems reliable; or

(b)

if the Stock is not readily tradeable on a national or regional securities exchange or market system and is not quoted on the OTCBB, the fair market value as determined in good faith by the Board or the Committee, by the reasonable application of a reasonable valuation method in accordance with Section 409A and Treasury Regulation Section 1.409A-1(b)(5)(iv)(B) (or any similar or successor provision), thereunder, as the Board or the Committee will in its discretion select and apply at the time of the Award Date, time of exercise, or other date of calculation.

“Incentive Compensation Award” means a cash-denominated award based on the achievement of Performance Goals, subject to the requirements of Article 11 and awarded in accordance with the terms of the Plan.

“Insider” means an Officer, Director, or other person whose transactions in Stock are subject to Section 16 of the Exchange Act.

“Insider Trading Policy” means the written policy of the Corporation pertaining to the purchase, sale, transfer or other disposition of the Corporation’s equity securities by Directors, Officers, Employees or other service providers who may possess material, nonpublic information regarding the Corporation or its securities.

“Non-Qualified Stock Option” means an Option that is not intended to (as set forth in the Award Agreement) or that does not qualify as an “incentive stock option” within the meaning of Code Section 422.

“Officer” means any person designated by the Board as an officer of the Corporation.

“Option” means an option to purchase Stock at an Exercise Price determined on the Award Date, subject to the applicable provisions of Article 5, awarded in accordance with the terms and conditions of the Plan.

“Participant” means an Eligible Individual to whom the Committee has made one or more Awards under the Plan in accordance with Section 4.1 of the Plan.

“Performance Goals” will mean performance goals established by the Committee prior to the grant of an Award and based on the attainment of one or any combination of the following, in each case of the Corporation, an Affiliate, or business unit by or within which the Participant is primarily employed or a combination thereof, and that are intended to qualify under Section 162(m): (a) net earnings; (b) operating earnings or income; (c) earnings growth; (d) net income; (e) net income per share; (f) gross revenue or revenue by pre-defined business segment; (g) revenue backlog; (h) pre- or post-tax profit margins; (i) cash flow, including operating cash flow, free cash flow, discounted cash flow return on investment, and cash flow in excess of cost of capital; (j) earnings per share; (k) return on stockholders’ equity; (l) stock price; (m) return on common stockholders’ equity; (n) return on capital; (o) return on assets; (p) economic value added (income in excess of cost of capital); (q) customer satisfaction; (r) cost control or expense reduction; (s) ratio of operating expenses to operating revenues; (t) market share; (u) volume; (v) revenue per contract; and (w) adjusted pretax income, in each case, absolute or relative to peer- group comparative.

The Committee also may benchmark Performance Goals under one or more of the measures described above relative to the performance of other corporations. The Committee will set such Performance Goals within the time prescribed by Section 162(m). The Committee will have the discretion to adjust targets set for pre-established performance objectives as it deems appropriate to reflect the inclusion or exclusion of the impact of extraordinary or unusual items, events or circumstances in accordance with Section 162(m). If the Committee determines it is advisable to grant Awards that will not qualify for the performance-based exception of Section 162(m), the Committee may grant Awards that do not so qualify.

“Performance Period” means a period of one or more years, as determined by the Committee.

“Person” means a “person” as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act.

“Plan” means the Second Amended and Restated CBOE Holdings, Inc. Long-Term Incentive Plan (second amendment and restatement effective February 17, 2016), as set forth herein, as the same may be further amended, administered or interpreted from time to time.

“Public Offering” means any sale of any class of the Corporation’s equity securities pursuant to an effective registration statement under Section 12 of the Exchange Act filed with the SEC on Form S-1 (or any successor form adopted by the SEC), provided that the following will not be considered a public offering: (a) any issuance of common equity securities by the Corporation as consideration for a merger or acquisition, (b) any issuance of common securities to employees, directors or consultants of any of the Corporation or any of its Affiliates as part of an incentive or compensation plan, (c) any issuance of common equity securities as part of a unit with debt or preferred stock or any similar structure in which the common equity securities are being offered primarily as a means of enhancing the Corporation’s ability to sell the debt or preferred stock and (d) the issuance of Stock by the Corporation upon conversion of any preferred stock of the Corporation.

“Restricted Stock” means an award of shares of Stock delivered under the Plan subject to the requirements of Article 6 and such other restrictions as the Committee deems appropriate or desirable. The restrictions on, and risk of forfeiture of, Restricted Stock generally will expire on a specified date, upon the occurrence of an event or achievement of Performance Goals, or on an accelerated basis under certain circumstances specified in the Plan or the Award Agreement.

“Restricted Stock Unit” means a notional account established pursuant to an Award granted to a Participant, as described in Article 7, that is (a) valued solely by reference to shares of Stock, (b) subject to restrictions specified in the Award Agreement, and (c) payable in Stock or cash, in the Committee’s sole discretion. The restrictions on, and risk of forfeiture of, Restricted Stock Units generally will expire on a specified date, upon the occurrence of an event or achievement of Performance Goals, or on an accelerated basis under certain circumstances specified in the Plan or the Award Agreement.

“Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended, and any guidance issued thereunder by the SEC.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002. A reference to any provision of the Sarbanes-Oxley Act will include reference to any successor provision of the Sarbanes-Oxley Act.

“SEC” means the U.S. Securities and Exchange Commission.

“Section 162(m)” means Code Section 162(m), as amended, and any proposed and final regulations and other guidance issued thereunder by the U.S. Department of Treasury and/or the Internal Revenue Service.

“Section 409A” means Code Section 409A, as amended, and any proposed and final regulations and other guidance issued thereunder by the U.S. Department of Treasury and/or the Internal Revenue Service.

“Securities Act” means the Securities Act of 1933, as amended. A reference to any provision of the Securities Act will include reference to any successor provision of the Securities Act.

“Service” means the provision of personal services to the Corporation or its Affiliates in the capacity of (a) an Employee, (b) a Director, or (c) a consultant. A Participant’s Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders Service to the Corporation or its Affiliates, a transfer of the Participant among the Corporation and its Affiliates, or a change in the Corporation or Affiliate for which the Participant renders such Service, provided in each case that there is no interruption or termination of the Participant’s Service. Additionally, a Participant’s Service shall not be deemed to have terminated if the Participant takes any military leave, sick leave, or other bona fide leave of absence approved by the Corporation, provided that if any such leave taken by a Participant exceeds 90 days, then on the 91st day immediately following such 90-day period, the Participant’s Service shall be deemed to have terminated, unless the Participant’s right to return to Service is guaranteed by statute or contract. Notwithstanding the foregoing, unless otherwise designated by the Corporation, a leave of absence authorized by the Corporation shall be treated as Service for purposes of determining vesting under the Award Agreement. A Participant’s Service shall be deemed to have terminated either upon an actual termination of Service or upon the time that the entity for which the Participant performs Service ceases to be an Affiliate of the Corporation. Subject to the foregoing, the Corporation, in its discretion, shall determine whether the Participant’s Service has terminated and the effective date of and reason for such termination.

“Stock” means the “Common Stock” of the Corporation (as defined in Article Fourth (a)(i) of the Second Amended and Restated Certificate of Incorporation of the Corporation).

ARTICLE 2

PLAN ADMINISTRATION

Section 2.1 Administration . The Committee will administer the Plan. The Committee will interpret the Plan and any Award Agreement or other form of agreement or other document used by the Corporation in the administration of the Plan or of any Award, and prescribe such rules, regulations, and procedures in connection with the operation of the Plan, as it deems to be necessary and advisable for the administration of the Plan consistent with the purposes of the Plan. Without limiting the foregoing, the Committee will have the authority and complete discretion to:


(a)	Prescribe, amend, and rescind rules and regulations relating to the Plan and any Awards;


(b)	Select Eligible Individuals (including members of the Committee) to receive Awards, as provided in Section 4.1 of the Plan;


(c)	Determine the form and terms of Awards;


(d)	Determine the number of shares of Stock or other consideration subject to Awards, as provided in Articles 5 through 9 of the Plan;


(e)	Determine whether Awards will be granted singly, in combination or in tandem with, in replacement of, or as alternatives to, other Awards under the Plan or grants or awards under any other incentive or compensation plan of the Corporation;


(f)	Construe and interpret the Plan, any Award Agreement in connection with an Award and any other agreement or document executed pursuant to the Plan;


(g)	Correct any defect or omission, or reconcile any inconsistency in the Plan, any Award or any Award Agreement;


(h)	Accelerate or, with the consent of the Participant, defer the vesting of any Award or the exercise date of any Award, subject to the limitations of Section 409A;

(i)

Authorize any person to execute on behalf of the Corporation any instrument required to effectuate the grant of an Award and delegate to Officers of the Corporation the authority to perform administrative functions under the Plan subject to any legal requirements that the Committee as a whole take action with respect to such function, other than any such delegation that would cause Awards or other transactions under the Plan to cease to (i) be exempt from Section 16(b) of the Exchange Act, (ii) satisfy the independent director requirements of the applicable national or regional securities exchange or market system, or (iii) qualify as “performance-based compensation” under Section 162(m);

(j)

To the extent permissible under Section 141(c) and Section 157(c) of the Delaware General Corporation Law and other applicable laws, regulations and stock exchange rules, the Board and the Committee may each, in their discretion, delegate to another committee or one or more officers of the Corporation, any or all of the authority and responsibility of the Committee with respect to awards to Employees who are not subject to Section 16 of the Exchange Act at the time any such delegated authority or responsibility is exercised. To the extent that the Board or the Committee has delegated to such other committee or to one or more officers of the Corporation, the authority and responsibility of the Committee pursuant to the foregoing, all references to the Committee in the Plan shall be deemed to refer to such other committee or to such officer or officers;

(k)

Amend, modify, extend, cancel or renew any Award, and authorize the exchange, substitution, or replacement of Awards, provided that (i) no such amendment, modification, extension, cancellation, renewal, exchange, substitution, or replacement will be to the detriment of a Participant with respect to any Award previously granted without the affected Participant’s written consent, (ii) any such amendment, modification, extension, cancellation, renewal, exchange, substitution or replacement must satisfy the requirements for exemption under Section 409A, and (iii) in no event will the Committee be permitted to reduce the Exercise Price of any outstanding Option, cancel an Option in exchange for cash or other Awards, exchange or replace an outstanding Option with a new Option with a lower Exercise Price, or take any other action that would be a “repricing” of Options, without stockholder approval, except pursuant to Section 5.2;


(l)	Determine whether a Participant has engaged in the operation or management of a business that is in competition with the Corporation or any of its Affiliates, or whether a Participant has violated the restrictive covenants referred to in Section 10.12; and


(m)	Make all other determinations deemed necessary or advisable for the administration of the Plan.

The Committee will keep records of action taken at its meetings. A majority of the Committee will constitute a quorum at any meeting, and the acts of a majority of the members present at any meeting at which a quorum is present, or acts approved in writing by a majority of the Committee, will be the acts of the Committee.

Section 2.2 Administration with Respect to Insiders. With respect to Eligible Individuals who are Insiders, at any time that any class of equity security of the Corporation is registered under Section 12 of the Exchange Act, the Plan shall be administered in compliance with the requirements, if any, of Rule 16b-3.

Section 2.3 Indemnification. Each person who is or has been a member of the Committee or the Board, and any individual or individuals to whom the Committee has delegated authority under this Article 2, will be indemnified and held harmless in accordance with the Corporation’s Second Amended and Restated Certificate of Incorporation.

ARTICLE 3

AUTHORIZED SHARES

Section 3.1 Shares Available Under the Plan . Subject to adjustment as set forth in Section 3.2, the maximum number of shares of Stock that may be issued or delivered and as to which Awards may be granted under the Plan will be equal to the sum of: (a) 4,248,497 shares of Stock, which were authorized at the time that the Plan was first adopted by the Board effective January 13, 2010; (b) 3,000,000 shares of Stock; (c) any shares of Stock subject to an Award under the Plan that expires without being exercised, or is forfeited, canceled, settled or otherwise terminated without a distribution of Stock to the Participant; (d) shares of Stock not delivered to the Participant because the Award is exercised through a reduction of shares subject to the Award (i.e., “net exercised”); and (e) shares of Stock delivered (either actually or by attestation) to or withheld by the Corporation in connection with the exercise of an Option awarded under the Plan, or in payment of any required income tax withholding for the exercise

of an Option or the vesting of Restricted Stock awarded under the Plan. The shares that may be issued or delivered under the Plan may be either authorized but unissued shares, repurchased shares, or partly each.

If any Award granted under the Plan is canceled by mutual consent or terminates or expires for any reason without having been exercised in full, or, if and to the extent that an Award of Restricted Stock Units is paid in cash rather than the issuance of shares of Stock, the number of shares subject to such Award (or in the case of Restricted Stock Units, the number of shares of Stock for which payment was made in cash) will again be available for purposes of the Plan.

If, in connection with an acquisition of another company or all or part of the assets of another company by the Corporation or an Affiliate, or in connection with a merger or other combination of another company with the Corporation or an Affiliate, the Corporation either (i) assumes stock options or other stock incentive obligations of such other company, or (ii) grants stock options or other stock incentives in substitution for stock options or other stock incentive obligations of such other company, then none of the shares of Stock that are issuable or transferable pursuant to such stock options or other stock incentives that are assumed or granted in substitution by the Corporation will be charged against the limitations set forth in this Section 3.1.

Section 3.2 Adjustment and Substitution of Shares. If a dividend or other distribution will be declared upon the Stock, payable in shares of Stock, the number of shares of Stock then subject to any outstanding Award or by reference to which the amount of any other Award is determined and the number of shares that may be issued or delivered under the Plan will be adjusted by adding thereto the number of shares that would have been distributable thereon if such shares had been outstanding on the date fixed for determining the stockholders entitled to receive such dividend or distribution.

If the outstanding shares of Stock will be changed into or exchangeable for a different number or kind of shares of Stock or other securities of the Corporation or another corporation, whether through reorganization, reclassification, recapitalization, stock split-up, combination of shares, merger or consolidation, then the Committee will substitute for each share of Stock subject to any then-outstanding Award and for each share of Stock, which may be issued or delivered under the Plan but is not then subject to an outstanding Award, the number and kind of shares of Stock or other securities into which each outstanding share of Stock is so changed or for which each such share is exchangeable, provided that in the event of a merger, acquisition or other business combination of the Corporation with or into another entity, any adjustment provided for in the applicable agreement and plan of merger (or similar document) will be conclusively deemed to be appropriate for purposes of this Section 3.2.

In the case of any adjustment or substitution as provided for in this Section 3.2, the aggregate Exercise Price for all shares subject to each then-outstanding Option prior to such adjustment or substitution will be the aggregate Exercise Price for all shares of Stock or other securities (including any fraction) to which such shares will have been adjusted or which will have been substituted for such shares. Any new Exercise Price per share will be carried to at least three decimal places with the last decimal place rounded upwards.

No adjustment or substitution provided for in this Section 3.2 will require the Corporation to issue or sell a fraction of a share or other security. Accordingly, all fractional shares or other securities that result from any such adjustment or substitution will be eliminated and not carried forward to any subsequent adjustment or substitution.

If any adjustment or substitution would cause a modification, extension or renewal of an Option within the meaning of Section 409A, the Committee may elect that such adjustment or substitution not be made but rather will use reasonable efforts to effect such other adjustment of each then-outstanding Option as the Committee in its sole discretion will deem equitable and that will not result in any such modification, extension or renewal under Section 409A.

ARTICLE 4

ELIGIBILITY AND AWARDS

Section 4.1 Eligibility. Subject to the provisions of the Plan, the Committee will have full and final authority, in its discretion, to grant Awards as described herein and to determine the Eligible Individuals to whom Awards will be granted.

Section 4.2 Award Agreement. Each Award granted under the Plan will be evidenced by a written or electronic Award Agreement, in a form approved by the Committee. Such Award Agreement will be subject to and incorporate the express terms and conditions, if any, required under the Plan or as required by the Committee for the form of Award granted and such other terms and conditions as the Committee may specify, and will be executed by the Chief Executive Officer, the President (if other than the Chief Executive Officer), or any person designated as an executive Officer by the Board for Section 16 purposes, on behalf of the Corporation, and by the Participant to whom such Award is granted. The Board may at any time and from time to time amend an outstanding Award Agreement in a manner consistent with the Plan.

Section 4.3 Corporation’s Obligation to Deliver Stock . The obligation of the Corporation to issue or deliver shares of Stock under the Plan will be subject to (a) the effectiveness of a registration statement under the Securities Act, with respect to such shares, if deemed necessary or appropriate by counsel for the Corporation; (b) the condition that the shares will have been listed (or authorized for listing upon official notice of issuance) upon each stock exchange on which such shares may then be listed; and (c) all other applicable laws, regulations, rules and orders that may then be in effect.

ARTICLE 5

STOCK OPTIONS

Section 5.1 Grant of Stock Options. The Committee will have authority, in its discretion, to grant Non-Qualified Stock Options. Options granted under the Plan will be subject to the following terms and conditions of this Article 5.

Section 5.2 Exercise Price. Subject to adjustment as set forth in Section 3.2, the Exercise Price will be such price as the Committee, in its discretion, will determine and set forth in the Award Agreement, except that, the Exercise Price will not be less than one hundred percent (100%) of the Fair Market Value per share of Stock covered by the Option as determined on the Award Date.

Section 5.3 Payment of Exercise Price. The Exercise Price will be payable in full in any one or more of the following ways:


(a)	in cash, check, bank draft, money order or wire transfer payable to the Corporation;


(b)	by delivery to the Corporation (either by actual delivery or by attestation) of shares of Stock (which are owned by the Participant free and clear of all liens and other encumbrances and which are not subject to the restrictions set forth in Article 6) having an aggregate Fair Market Value on the date of exercise of the Option equal to the Exercise Price for the shares being purchased;


(c)	by requesting that the Corporation withhold such number of shares of Stock then issuable upon exercise of the Option as will have an aggregate Fair Market Value equal to the Exercise Price for the shares being acquired upon exercise of the Option (and any applicable withholding taxes);

(d)

by a “net exercise” arrangement under which the Corporation will reduce the number of shares of Stock issued upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate Exercise Price; provided that the Corporation shall accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate Exercise Price not satisfied by such reduction in the number of whole shares to be issued; and provided further that shares of Stock will no longer be outstanding under an Option and will not be exercisable thereafter to the extent that (i) shares are used to pay the Exercise Price pursuant to the “net exercise,” (ii) shares are delivered to the Participant as a result of such exercise, and (iii) shares are withheld to satisfy tax withholding obligations;


(e)	provided that a public market for the Corporation’s Stock exists, and to the extent permitted by the Sarbanes-Oxley Act:

(i)

through a “same day sale” commitment from the Participant and a broker- dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby the Participant irrevocably elects to exercise the Option and to sell a portion of the shares so purchased to pay the Exercise Price (or a larger number of the shares so purchased), and whereby the FINRA Dealer irrevocably commits upon receipt of such shares to forward the Exercise Price directly to the Corporation (and any excess to the Participant);

(ii)

through a “margin” commitment from the Participant and a FINRA Dealer whereby the Participant irrevocably elects to exercise the Option and to pledge the shares so purchased to the FINRA Dealer in a margin account as security for a loan from the FINRA Dealer in the amount of the Exercise Price, and whereby the FINRA Dealer irrevocably commits upon receipt of such shares to forward the Exercise Price directly to the Corporation; or


(f)	by any combination of the foregoing.

If the Exercise Price is paid in whole or in part in shares of Stock, any portion of the Exercise Price representing a fraction of a share will be paid in cash. The date of exercise of an Option will be determined under procedures established by the Committee, and the Exercise Price will be payable at such time or times as the Committee, in its discretion, will determine. No shares will be issued or delivered upon exercise of an Option until full payment of the Exercise Price has been made. When full payment of

the Exercise Price has been made, the Participant will be considered for all purposes to be the owner of the shares with respect to which payment has been made.

Section 5.4 Exercisability, Expiration, and Term of Options. Subject to this Section 5.4 and Section 2.1, Options may be exercised at such times, in such amounts and subject to such restrictions as will be determined by the Committee, in its discretion. An Option may be exercised (a) at such time as the Option vests, or (b) if and to the extent set forth in the applicable Award Agreement, prior to the date on which the Option vests, provided that such Stock obtained will be subject to the same requirements that are applicable to grants of Restricted Stock set forth in Article 6 and in the applicable Award Agreement. After an Option is granted, the Committee, in its sole discretion, may accelerate the exercisability of the Option. Restrictions and conditions on the exercise of an Option need not be the same for each Award or for each Participant.

Each Option will terminate not later than the expiration date specified in the Award Agreement pertaining to such Option, provided that the expiration date with respect to an Option shall not be later than the 10th anniversary of its Award Date.

Except as otherwise provided in the Award Agreement, the vesting conditions on an Option will lapse upon the date that a Participant dies or becomes Disabled. Except as otherwise provided in the Award Agreement, a Participant (or his or her beneficiary, as applicable) must exercise any outstanding Option, if any, within one year following the Participant’s death or Disability (or by the 10th anniversary of the Option’s Award Date, if earlier). If the Participant does not exercise any outstanding Option within one year from the Participant’s death or Disability (or by the 10th anniversary of the Option’s Award Date, if earlier), the outstanding Option will be cancelled and forfeited.

Subject to the preceding paragraph, unless otherwise determined by the Committee and set forth in an Award Agreement or an amendment thereto, following a Participant’s termination of Service for any reason other than Cause, such Participant must exercise any outstanding Option, if at all, within 90 days from the date of termination of Service (or by the 10th anniversary of the Option’s Award Date, if earlier). If the Participant does not exercise any outstanding Option within 90 days from the date of termination of Service (or by the 10th anniversary of the Option’s Award Date, if earlier), the outstanding Option will be cancelled and forfeited. All Options, including vested Options, will be cancelled and forfeited immediately upon a Participant’s termination of Service for Cause.

Notwithstanding any contrary provision of this Section 5.4, if, on the date an outstanding Option would expire, the exercise of the Option would violate applicable securities laws, the expiration date applicable to the Option will be extended to a date that is 30 calendar days after the date the exercise of the Option would no longer violate applicable securities laws.

ARTICLE 6

RESTRICTED STOCK

Section 6.1 Award. Subject to the terms and provisions of the Plan, the Committee may award, at any time, shares of Restricted Stock to any Eligible Individual in the number and form, and subject to such restrictions on transferability and other restrictions as the Committee may determine in its discretion and set forth in the Award Agreement, including without limitation the achievement of Performance Goals. Restricted Stock also may be received by a Participant as the result of an exercise of an Option, when such award has not vested.

Section 6.2 Vesting and Restrictions on Transfer. Shares issued pursuant to any Restricted Stock Award shall be made subject to vesting conditions based upon the satisfaction of such Service requirements, conditions, restrictions or Performance Goals as the Committee shall establish and set forth in the Award Agreement. During any period in which shares acquired under a Restricted Stock Award remain subject to vesting conditions, such shares may not be sold, exchanged, transferred, pledged, assigned or otherwise disposed of. Except as otherwise provided in the Award Agreement, the vesting conditions on any shares of Restricted Stock will expire and the restrictions on shares of Restricted Stock will lapse upon the date that a Participant dies or becomes Disabled. Upon request by the Corporation, each Participant shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to the Corporation any and all certificates representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing any such transfer restrictions.

Section 6.3 Termination of Service. Except as otherwise provided in Section 6.2 above, if a Participant’s termination of Service occurs for any reason before the expiration of the vesting conditions, all shares of Restricted Stock that remain subject to vesting conditions will be forfeited by the Participant as of the Participant’s termination of Service, unless the Committee otherwise determines. In the case of Restricted Stock purchased through the exercise of an Option, the Corporation will refund the Exercise Price paid on the exercise of the Option. Such forfeited shares of Restricted Stock will again become available for award under the Plan.

Section 6.4 Voting Rights; Dividends and Distributions. Except as provided in this Section 6.4 or the Award Agreement, during any period in which shares acquired pursuant to a Restricted Stock Award remain subject to vesting conditions, the Participant shall have all of the rights of a stockholder of the Corporation holding shares of Stock, including the right to vote such shares and to receive all dividends and other distributions paid with respect to such shares. Unless otherwise provided for in an Award Agreement, for a Restricted Stock Award based upon the satisfaction of Performance Goals, the Participant shall be entitled to receive dividends or other distributions during the period beginning on the date a Restricted Stock Award is granted and ending, with respect to each share of Stock underlying the Award, on the earlier of the date the Performance Period is completed or the date on which the Award is terminated. Dividends or other distributions paid on a Restricted Stock Award based upon the satisfaction of Performance Goals will be based on the number of shares earned by the Participant. However, in the event of a dividend or distribution paid in shares of Stock or other property or any other adjustment made upon a change in the capital structure of the Corporation as described in Section 3.2, any and all new, substituted or additional securities or other property (other than normal cash dividends) to which the Participant is entitled by reason of the Participant’s Restricted Stock Award shall be immediately subject to the same vesting conditions as the shares subject to the Restricted Stock Award with respect to which such dividends or distributions were paid or adjustments were made.

ARTICLE 7

RESTRICTED STOCK UNIT AWARDS

Section 7.1 Award. Subject to the terms and provisions of the Plan, the Committee may award, at any time, Restricted Stock Units to any Eligible Individual in the number and form, and subject to such restrictions on transferability and other restrictions as the Committee may determine in its discretion and set forth in the Award Agreement, including without limitation the achievement of Performance Goals.

Section 7.2 Purchase Price. No monetary payment (other than applicable tax withholding, if any) shall be required as a condition of receiving a Restricted Stock Unit Award, the consideration for which shall be services actually rendered to or for the benefit of the Corporation or an Affiliate.

Section 7.3 Vesting. Restricted Stock Unit Awards shall be made subject to vesting conditions based upon the satisfaction of such Service requirements, conditions, restrictions or Performance Goals as the Committee shall establish and set forth in the Award Agreement. Except as otherwise provided in the Award Agreement, the vesting conditions on any Restricted Stock Unit Award will expire and the Restricted Stock Unit will become fully vested upon the date that a Participant dies or becomes Disabled.

Section 7.4 Voting Rights, Dividend Equivalent Rights and Distributions. Participants shall have no voting rights with respect to shares of Stock represented by Restricted Stock Units until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Corporation or of a duly authorized transfer agent of the Corporation).

The Committee, in its discretion, may provide in the Award Agreement evidencing any Restricted Stock Unit Award that the Participant shall be entitled to receive Dividend Equivalent Rights during the period beginning on the date a Restricted Stock Unit Award is granted and ending, with respect to each share of Stock underlying the Award, on the earlier of the date the Award vests or the date on which it is terminated. For a Restricted Stock Unit Award based upon the satisfaction of Performance Goals, the Dividend Equivalent Rights paid will be based on the number of shares earned by the Participant. However, in the event of a dividend or distribution paid in shares of Stock or other property or any other adjustment made upon a change in the capital structure of the Corporation as described in Section 3.2, any and all new, substituted or additional securities or other property (other than normal cash dividend equivalents) to which the Participant may be entitled by reason of the Participant’s Restricted Stock Unit Award shall be immediately subject to the terms and conditions and shall be settled in the same manner and at the same time as the Restricted Stock Unit Award with respect to which such Dividend Equivalent Rights were paid or adjustments were made.

Section 7.5 Effect of Termination of Service. Except as otherwise provided in Section 7.3 above or by the Committee and set forth in the Award Agreement evidencing a Restricted Stock Unit Award, if a Participant’s Service terminates for any reason, whether voluntary or involuntary, then the Participant shall forfeit any Restricted Stock Units that remain subject to vesting conditions as of the date of the Participant’s termination of Service.

Section 7.6 Settlement of Restricted Stock Unit Awards. The Corporation shall issue to a Participant on the date on which Restricted Stock Units subject to the Participant’s Restricted Stock Unit Award vest or on such other date determined by the Committee, in its discretion, and set forth in the Award Agreement one share of Stock (and/or any other new, substituted or additional securities or other property pursuant to an adjustment described in Section 3.2) for each Restricted Stock Unit then becoming vested or otherwise to be settled on such date, subject to the withholding of applicable taxes, if any. If permitted by the Committee, the Participant may elect, consistent with the requirements of Section 409A and in accordance with such procedures as the Committee may specify from time to time, to defer receipt of all or any portion of the shares of Stock or other property

otherwise issuable to the Participant pursuant to this Section 7.6. Notwithstanding the foregoing, the Committee, in its discretion, may provide in any Award Agreement for settlement of any Restricted Stock Unit Award by payment to the Participant in cash of an amount equal to the Fair Market Value on the vesting date of the shares of Stock or other property otherwise issuable to the Participant pursuant to this Section 7.6. Notwithstanding the foregoing, any Stock issued or cash paid to the Participant in settlement of the Restricted Stock Units will be issued or paid, as applicable, as soon as administratively practicable following the applicable vesting date but in no event later than March 15th of the year following such vesting date (unless such Restricted Stock Unit has been deferred as permitted by the Committee under this Section 7.6).

ARTICLE 8

CHANGE IN CONTROL

Section 8.1 Accelerated Vesting. Unless otherwise provided for in an Award Agreement, Awards will be “double-trigger” unless a successor entity cannot or will not provide a Replacement Award (as defined below), in which case the Award will revert to “single-trigger” as follows:

Upon a Change in Control, all then-outstanding Awards shall vest in accordance with paragraphs (a), (b), and (c) below, except (i) as otherwise provided in an Award Agreement or (ii) to the extent that another Award meeting the requirements of Section 8.2(a) (a “Replacement Award”) is provided to the Participant pursuant to Section 3.2 and consistent with Section 409A, to the extent applicable, to replace such Award (the “Replaced Award”).

(a)

Outstanding Options . Upon a Change in Control in which the Corporation is the surviving corporation, a Participant’s then-outstanding Options that are not vested shall immediately become fully vested (and, to the extent applicable, all performance conditions shall be deemed satisfied as if target performance were achieved) and exercisable over the exercise period set forth in the applicable Award Agreement. Upon a Change in Control in which the Corporation is not the surviving corporation, a Participant’s then-outstanding Options shall become fully vested and exercisable for such period of time prior to the Change in Control as is deemed fair and equitable by the Committee and shall terminate at the effective time of the Change in Control. The Committee shall provide written notice of the period of accelerated exercisability of Options to all affected Participants. The exercise of any Option whose exercisability is accelerated as provided in this paragraph (a) shall be conditioned upon the consummation of the Change in Control and shall be effective only immediately before such consummation. Alternatively, the Committee may elect to cancel such Options and pay the Participant an amount of cash (less normal withholding taxes) equal to the excess of (i) the value, as determined by the Committee, of the consideration (including cash) received by the holder of a share of Stock as a result of the Change in Control (or if the Corporation's stockholders do not receive any consideration as a result of the Change in Control, the Fair Market Value of a share of Stock on the day immediately prior to the Change in Control) over (ii) the per-share Exercise Price of such Option, multiplied by the number of shares of Stock subject to such Award. No payment shall be made to a Participant for any Option if the Exercise Price for such Option exceeds the value, as determined by the Committee, of the consideration (including cash) received by the holder of a share of Stock as a result of the Change in Control.

(b)

Outstanding Awards, other than Options, Subject Solely to a Service Vesting Condition . Upon a Change in Control, a Participant’s then-outstanding Awards, other than Options, that are not vested and as to which vesting depends solely on the satisfaction of a service obligation by the Participant to the Corporation or any Affiliate shall become fully vested and shall be settled in cash, Stock or a combination thereof, as determined by the Committee, within 30 days following such Change in Control (except to the extent that settlement of the Award must be made pursuant to its original schedule in order to comply with Section 409A).

(c)

Outstanding Awards, other than Options, Subject to a Performance Vesting Condition . Upon a Change in Control, a Participant’s then-outstanding Awards, other than Options, that are not vested and as to which vesting depends upon the satisfaction of one or more performance conditions shall immediately vest and all performance conditions shall be deemed satisfied at the greater of target performance or the level of performance actually achieved as of the date of the Change in Control (with similar performance assumed to be achieved through the remainder of the performance period) and shall be settled in cash, Stock or a combination thereof, as determined by the Committee, within 30 days following such Change in Control (except to the extent that settlement of the Award must be made pursuant to its original schedule in order to comply with Section 409A).

Section 8.2 Replacement Awards .


(a)	An Award shall meet the conditions of this Section 8.2 (and hence qualify as a Replacement Award) if: (i) it is of the same type as the Replaced Award (provided, however, that the Replacement Award may be of a different

type as the Replaced Award if such Replacement Award has been approved by the Committee, as constituted immediately prior to the Change in Control); (ii) it has an intrinsic value at least equal to the value of the Replaced Award; (iii) it relates to publicly traded equity securities of the Corporation or its successor following the Change in Control or another entity that is affiliated with the Corporation or its successor following the Change in Control; (iv) its terms and conditions comply with Section 8.2(b); and (v) its other terms and conditions are not less favorable to the Participant than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation or assumption of the Replaced Award if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this Section 8.2(a) are satisfied shall be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion. Without limiting the generality of the foregoing, the Committee may determine the value of Replaced Awards and Replacement Awards that are Options by reference to either their intrinsic value or their fair value.

(b)

Upon a termination of Service of a Participant after a Change in Control, other than for Cause, all Replacement Awards held by the Participant shall become fully vested and free of restrictions and in the case of Replacement Awards in the form of (i) Options shall be fully exercisable and shall remain exercisable in accordance with their terms, (ii) Awards with one or more performance-based vesting conditions for performance measurement periods not yet ended at the date of termination shall be deemed to be satisfied at the greater of target performance or the level of performance actually achieved as of the date of termination of Service (with similar performance assumed to be achieved through the remainder of the performance period) and shall be paid upon or within 60 days of such termination of Service, (iii) Awards (other than Options) with only service-based vesting conditions shall be paid upon or within 60 days of such termination of Service. Notwithstanding the foregoing, with respect to any Award that is considered deferred compensation subject to Section 409A, payment shall be made pursuant to the Award’s original schedule in order to comply with Section 409A.

Section 8.3 Excess Parachute Payment . In the event that any acceleration of vesting pursuant to an Award and any other payment or benefit received or to be received by a Participant would subject the Participant to any excise tax pursuant to Code Section 4999 due to the characterization of such acceleration of vesting, payment or benefit as an excess parachute payment under Code Section 280G, the Participant may elect, in his or her sole discretion, to reduce the amount of any acceleration of vesting called for under the Award in order to avoid such characterization. To aid the Participant in making any election made under this Section 8.3, no later than the date of the occurrence of any event that might reasonably be anticipated to result in an excess parachute payment to the Participant, the Corporation shall request a determination in writing by independent experts selected by the Corporation. As soon as practicable thereafter, the independent experts shall determine and report to the Corporation and the Participant the amount of such acceleration of vesting, payments and benefits that would produce the greatest after-tax benefit to the Participant. For the purposes of such determination, the independent experts may rely on reasonable, good faith interpretations concerning the application of Code Sections 280G and 4999. The Corporation and the Participant shall furnish to the independent experts such information and documents as the experts may reasonably request in order to make their required determination. The Corporation shall bear all fees and expenses the independent experts may reasonably charge in connection with their services contemplated by this Section 8.3, and any excise tax, income tax, interest, or penalties imposed on the Participant as a result of a successful Internal Revenue Service claim that, contrary to the determination and report of the independent experts, the Participant must pay an excise tax under Code Section 4999 due to the characterization of such acceleration of vesting, payment or benefit as an excess parachute payment under Code Section 280G.

ARTICLE 9

CERTIFICATES FOR AWARDS OF STOCK

Section 9.1 Stock Certificates. Except as otherwise provided in this Section 9.1, each Participant entitled to receive shares of Stock under the Plan will be issued a certificate for such shares. Such certificate will be registered in the name of the Participant and will bear an appropriate legend reciting the terms, conditions and restrictions, if any, applicable to the Stock and will be subject to appropriate stop-transfer orders. To the extent that the Plan provides for issuance of stock certificates to reflect the issuance of shares of Stock, the issuance may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange or market system. If the issuance of shares under the Plan is effected on a non-certificated basis, the issuance of shares to a Participant will be reflected by crediting (by means of a book entry) the applicable number of shares of Stock to an account maintained by the Corporation in the name of such Participant, which account may be an account maintained by the Corporation for such Participant under any dividend reinvestment program offered by the Corporation. The Committee may require, under such terms and conditions as it deems appropriate or desirable, that the certificates for Restricted Stock delivered under the Plan be held in custody by a bank or other institution, or that the Corporation may itself hold such shares in custody until the vesting conditions expire or until restrictions thereon otherwise lapse, and may require, as

a condition of any receipt of Restricted Stock, that the recipient will have delivered a stock power endorsed in blank relating to the Restricted Stock. Certificates for shares of unrestricted Stock may be delivered to the Participant after, and only after, the vesting conditions will have expired without forfeiture in respect of such shares of Restricted Stock.

Section 9.2 Compliance With Laws and Regulations. The grant of Awards and the issuance of shares of Stock pursuant to an Award shall be subject to compliance with all applicable requirements of Federal, state, local and non-U.S. law with respect to such securities and the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, no Award may be exercised or shares of Stock issued pursuant to an Award unless (a) a registration statement under the Securities Act shall at the time of such exercise or issuance be in effect with respect to the shares issuable pursuant to the Award, or (b) in the opinion of legal counsel to the Corporation, the shares issuable pursuant to the Award may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the Corporation to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Corporation’s legal counsel to be necessary to the lawful issuance and sale of any shares hereunder shall relieve the Corporation of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to issuance of any Stock, the Corporation may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Corporation.

Section 9.3 Restrictions. All certificates for shares of Stock delivered under the Plan (and all non-certificated shares credited to a Participant’s account as provided in Section 9.1) also will be subject to such stop-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the SEC, any stock exchange or quotation system upon which the Stock is then listed and any applicable Federal, state or non-U.S. securities laws; and the Committee may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions. The foregoing provisions of this Section 9.3 will not be effective if and to the extent that the shares of Stock delivered under the Plan are covered by an effective and current registration statement under the Securities Act, or if and so long as the Committee determines that application of such provisions is no longer required or desirable. In making such determination, the Committee may rely upon an opinion of counsel for the Corporation.

Section 9.4 Rights of Stockholders. Except as otherwise provided herein, no Participant awarded an Option or Restricted Stock Unit will have any right as a stockholder with respect to any shares subject to such Award prior to the date of issuance to him or her of a certificate or certificates for such shares, or if applicable, the crediting of non-certificated shares to an account maintained by the Corporation in the name of such Participant. No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such shares are issued, except as provided in Sections 3.2, 6.4, 7.4, or another provision of the Plan.

ARTICLE 10

MISCELLANEOUS

Section 10.1 Effect of the Plan on the Rights of Employees and Employer . Neither the adoption of the Plan nor any action of the Board or the Committee pursuant to the Plan will be deemed to give any Eligible Individual any right to be granted an Award and nothing in the Plan, in any Award granted under the Plan or in any Award Agreement will confer any right to any Participant to continue in the employment of the Corporation or any Affiliate or to continue to be retained to provide Services to the Corporation or any Affiliate as a Director, or consultant or interfere in any way with the rights of the Corporation or any Affiliate to terminate a Participant’s Service at any time.

Section 10.2 Amendment. The Board specifically reserves the right to alter and amend the Plan at any time and from time to time and the right to revoke or terminate the Plan or to suspend the granting of Awards pursuant to the Plan; provided that no such alteration, amendment, revocation, termination, or suspension will terminate any outstanding Award theretofore granted under the Plan, unless there is a liquidation or a dissolution of the Corporation; and provided further that no such alteration or amendment of the Plan will, without prior stockholder approval (a) increase the total number of shares of Stock that may be issued or delivered under the Plan; (b) make any changes in the class of Eligible Individuals; (c) extend the period set forth in the Plan during which Awards may be granted; or (d) make any changes that require stockholder approval under the rules and regulations of any securities exchange or market on which the Stock is traded. No alteration, amendment, revocation or termination of the Plan or suspension of any Award will materially adversely affect, without the written consent of the holder of an Award theretofore granted under the Plan, the rights of such holder with respect to such Award. The Committee may not amend any Award to extend the exercise period beyond a date that is later than the earlier of the latest date upon which the Award could have expired by its original terms under any circumstances or the 10th anniversary of the original date of grant of the Award, or otherwise cause the Award to become subject to Section 409A.

Section 10.3 Effective Date and Duration of Plan. The Plan was first adopted by the Board effective January 13, 2010. The Plan was amended and restated effective February 8, 2011. The Plan was further amended and restated by the second amendment and restatement effective February 17, 2016 (the “Effective Date”) provided that the Corporation’s stockholders approve such amendment of the Plan within one year of that date. The Plan will remain in effect until the earliest of the date (a) all shares authorized to be issued or transferred hereunder have been issued or transferred (b) the Plan is terminated by the Board, or (c) the 10th anniversary of the Effective Date, and will continue in effect thereafter with respect to any Awards outstanding at the time of such termination.

Section 10.4 Unfunded Status of Plan. The Plan will be unfunded. The Corporation will not be required to establish any special or separate fund nor to make any other segregation of assets to assume the payment of any benefits under the Plan. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award will give any such Participant any rights that are greater than those of a general unsecured creditor of the Corporation, provided that the Committee may authorize the creation of trusts or make other arrangements to meet the Corporation’s obligations under the Plan to deliver cash, shares or other property pursuant to any Award, which trusts or other arrangements will be consistent with the “unfunded” status of the Plan unless the Committee otherwise determines.

Section 10.5 Tax Withholding. Whenever the Corporation proposes or is required to distribute Stock under the Plan, the Corporation may require the recipient to remit to the Corporation an amount sufficient to satisfy any Federal, state, local and non-U.S. tax withholding requirements prior to the delivery of any certificate for such shares or, in the discretion of the Committee, the Corporation may withhold from the shares to be delivered the number of shares sufficient to satisfy all or a portion of the minimum tax withholding obligation (or, in the discretion of the Corporation, to satisfy up to the maximum tax withholding obligation as may be permitted under applicable accounting standards that would not result in an Award otherwise classified as an equity award under FASB Accounting Standards Codification Topic 718 to be classified as a liability award under FASB Accounting Standards Codification Topic 718 as a result of the withholding of Stock with a Fair Market Value in excess of the minimum statutory tax withholding obligation). Whenever payments under the Plan are to be made in cash, such payments may be net of an amount sufficient to satisfy any Federal, state, local and non-U.S. tax withholding requirements.

Any Award may provide that the Participant may elect, in accordance with any conditions set forth in such Award, to pay any withholding taxes in shares of Stock, provided that the Participant, by accepting the Award will be deemed to instruct and authorize the Corporation or its delegatee for such purpose to sell on his or her behalf a whole number of shares of Stock from those shares of Stock issuable to the Participant in payment of vested shares of Restricted Stock or Restricted Stock Units as the Corporation or its delegatee determines to be appropriate to generate cash proceeds sufficient to satisfy the minimum tax withholding obligation (or, in the discretion of the Corporation, to satisfy up to the maximum tax withholding obligation). This direction and authorization is intended to comply with the requirements of Rule 10b5- 1(c)(1)(i)(B) of the Exchange Act, and to be interpreted to comply with the requirements of Rule 10b5-1(c) of the Exchange Act. Such shares will be sold on the day the Restricted Stock or Restricted Stock Units become vested, which is the date the tax withholding obligation arises, or as soon thereafter as practicable. Unless otherwise provided by the Committee, the Participant will be responsible for all brokerage fees and other costs of sale, and the Participant will agree to indemnify and hold the Corporation harmless from any losses, costs, damages, or expenses relating to any such sale. To the extent the proceeds of such sale exceed the Participant’s tax withholding obligation ( e.g. , because of the need to sell whole shares), the Corporation or its delegatee may pay such excess in cash to the Participant through payroll. The Corporation is under no obligation to arrange for such sale at any particular price. The Participant agrees to pay to the Corporation as soon as practicable, including through additional payroll withholding, any amount of the tax withholding obligation that is not satisfied by the sale of shares described above.

Section 10.6 Benefits . Amounts received under the Plan are not to be taken into account for purposes of computing benefits under other plans.

Section 10.7 Successors and Assigns. The terms of the Plan will be binding upon the Corporation and its successors and assigns.

Section 10.8 Headings. Captions preceding the sections hereof are inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provision hereof.

Section 10.9 Applicable Laws, Rules and Regulations. The Plan and the grant of Awards will be subject to all applicable Federal, state, local and non-U.S. laws, rules and regulations and to such approval by any government or regulatory agency as may be required.

Section 10.10 Governing Law . To the extent not preempted by Federal law, the Plan, any Award Agreement, and documents evidencing Awards or rights relating to Awards 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 the Plan 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), the Plan will be exclusively in the courts in the State of Illinois, County of Cook, including the Federal Courts located therein (should Federal jurisdiction exist).

Section 10.11 Beneficiary Designation. Each Participant may name, from time to time, any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case the Participant should die or become Disabled before receiving any or all of his or her Plan benefits. Each beneficiary designation will revoke all prior designations by the same Participant, must be in a form prescribed by the Committee, and must be made during the Participant’s lifetime. If the Participant’s designated beneficiary predeceases the Participant or no beneficiary has been designated, benefits remaining unpaid at the Participant’s death will be paid to the Participant’s estate or other entity described in the Award Agreement.

Section 10.12 Forfeiture Events.

(a)

The Committee may specify in the Award Agreement that the Participant’s rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, but shall not be limited to, termination of Service for Cause or any act by a Participant, whether before or after termination of Service, that would constitute Cause for termination of Service.

(b)

The Award Agreement may provide that, notwithstanding any other provision of the Plan to the contrary, if the Participant breaches the non-compete, non- solicitation, non-disclosure or other restrictive covenants of the Award Agreement, whether during or after termination of Service, in addition to any other penalties or restrictions that may apply under any employment agreement, state law, or otherwise, the Participant will forfeit:


(i)	any and all Awards granted to him or her under the Plan, including Awards that have become vested and exercisable; and/or


(ii)	the profit the Participant has realized on the exercise of any Options, which is the difference between the Exercise Price and the Fair Market Value of the Option that the Participant exercises after terminating Service and within the six-month period immediately preceding the Participant’s termination of Service (the Participant may be required to repay such difference to the Corporation).

Section 10.13 Notice. Any notice or other communication required or permitted under the Plan must be in writing and must be delivered personally, sent by certified, registered or express mail, or sent by overnight courier, at the sender’s expense. Notice will be deemed given (a) when delivered personally or, (b) if mailed, three days after the date of deposit in the U.S. mail or, (c) if sent by overnight courier, on the regular business day following the date sent. Notice to the Corporation should be sent to CBOE Holdings, Inc., 400 South LaSalle Street, Chicago, Illinois 60605, Attention: General Counsel. Notice to the Participant should be sent to the 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 10.13 by giving the other party written notice of such change, in accordance with the procedures described above.

Section 10.14 Awards Not Transferable. Except as otherwise provided in the Award Agreement, no Option, Restricted Stock Award, or Restricted Stock Unit (or the right to receive shares of Stock under such Award) may be sold, transferred, exchanged, pledged, assigned, garnished, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. The Committee may require, in its discretion, a Participant’s guardian or legal representative to supply it with the evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant. The Award Agreement for a grant of Non-Qualified Stock Options may permit or may be amended to permit the Participant who received the Option, at any time prior to the Participant’s death, to assign all or any portion of the Option granted to him or her to (a) the Participant’s spouse or lineal descendants; (b) the trustee of a trust for the primary benefit of the Participant, the Participant’s spouse or lineal descendants, or any combination thereof; (c) a partnership of which the Participant, the Participant’s spouse and/or lineal descendants are the only partners; (d) custodianships for lineal descendants under the Uniform Transfers to Minors Act or any other similar statute; or (e) upon the termination of a trust by the custodian or trustee thereof or the dissolution or other termination of the family partnership or the termination of a custodianship under the Uniform Transfers to Minors Act or other similar statute, to the person or persons who, in accordance with the terms of such trust, partnership or custodianship are entitled to receive Options held in trust, partnership or custody. In such event, the spouse, lineal descendant, trustee, partnership or custodianship will be entitled to all of the Participant’s rights with respect to the assigned portion of such Option, and such portion of the Option will continue to be subject to all of the terms, conditions and restrictions applicable to the Option, as set forth herein and in the related Award Agreement. Any such assignment will be permitted only if (i) the Participant does not receive

any value or consideration thereof and (ii) the assignment is expressly permitted by the applicable Award Agreement. The Committee’s approval of the Award Agreement with assignment rights will not require the Committee to include such assignment rights in the Award Agreement with any other Participant. Any such assignment will be evidenced by an appropriate written document executed by the Participant, and the Participant will deliver a copy thereof to the Committee on or prior to the effective date of the assignment. An assignee or transferee of an Option must sign an agreement with the Corporation to be bound by the terms of the applicable Award Agreement.

Section 10.15 Awards to Non-U.S. Nationals and Employees Outside the U.S. Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in other countries in which the Corporation or an Affiliate operates or has Employees or Directors, the Committee, in its sole discretion, shall have the power and authority to:


(a)	Determine which Affiliates shall be covered by the Plan;


(b)	Determine which Employees and Directors outside the U.S. are eligible to participate in the Plan;


(c)	Modify the terms and conditions of any Award granted to Employees or Directors outside the U.S. to comply with applicable non-U.S. laws and/or to facilitate the operation and administration of Awards and the Plan;


(d)	Establish sub-plans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable; and


(e)	Take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals.

Section 10.16 Compliance With Section 409A . Notwithstanding any provision of the Plan to the contrary, the Plan is, and all Awards made under the Plan are, intended to comply with Section 409A, including the exceptions for stock rights, short-term deferrals, separation pay arrangements, reimbursements, and in-kind distributions, and shall be construed, interpreted and administered accordingly. If any provision of the Plan or the Award Agreement needs to be revised to satisfy the requirements of Section 409A, then such provision shall be modified or restricted to the extent and in the manner necessary to be in compliance with such requirements of Section 409A and any such modification will attempt to maintain the same economic results as were intended under the Plan and Award Agreement. The Corporation cannot guarantee that the Awards, payments and benefits that may be made or provided under the Plan will satisfy all applicable provisions of Section 409A. Payments made to a Participant under the Plan or the Award Agreement in error shall be returned to the Corporation and do not create a legally binding right to such payments.

Section 10.17 Severability. If any provision of the Plan or any Award Agreement is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or any Award Agreement under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Committee’s determination, materially altering the intent of the Plan or the Award Agreement, such provision shall be stricken as to such jurisdiction, person or Award Agreement, and the remainder of the Plan and any such Award Agreement shall remain in full force and effect.

Section 10.18 Employment Agreement. Notwithstanding any provision of the Plan or an Award Agreement to the contrary, to the extent an employment agreement between a Participant and the Corporation or an Affiliate provides vesting terms with respect to an Award that are more favorable to the Participant than those set forth in the Plan or an Award Agreement, the vesting terms in such employment agreement shall control.

ARTICLE 11

INCENTIVE COMPENSATION AWARDS

Section 11.1 Incentive Compensation Awards . In addition to any other Awards under the Plan, the Committee may make Incentive Compensation Awards to Employees, based on the achievement of Performance Goals. The Committee may specify, at the time of grant of an Incentive Compensation Award (other than an Option) to a Participant who is then a “Covered Employee” (as that term is defined in Section 162(m)(3) or any successor provision), or may be a Covered Employee as of the end of the tax year in which the Corporation would claim a tax deduction in connection with such Incentive Compensation Award, that all or any portion of such Award is intended to satisfy the requirements for qualified performance-based compensation under Section 162(m). With respect to each Incentive Compensation Award, the Committee shall establish, in writing, that the vesting and/or payment pursuant to the Incentive Compensation Award shall be conditioned on the attainment of specified Performance Goals selected by the Committee for the specified Performance Period. The Committee shall take such action no later than the earlier of (a) the date ninety (90) days after the commencement of the applicable Performance Period or (b) the date on which

twenty-five percent (25%) of the Performance Period has elapsed and, in any event, at a time when the outcome of the Performance Goals remain substantially uncertain.

Section 11.2 Payout of Incentive Compensation Awards . Except as provided in the applicable Award Agreement, a Participant must remain continuously in Service with the Corporation or an Affiliate through the last day of the Performance Period to be eligible to receive a payout of the Incentive Compensation Award. Unless the Committee specifies otherwise in the Award Agreement, payout of the Incentive Compensation Award will be made in cash. If permitted by the Committee, the Participant may elect, consistent with the requirements of Section 409A and in accordance with such procedures as the Committee may specify from time to time, to defer receipt of all or any portion of the Incentive Compensation Award otherwise payable to the Participant pursuant to this Section. A Participant who terminates employment before the end of the Performance Period will forfeit his or her Incentive Compensation Award; provided that, if the Participant’s employment terminated due to the Participant’s death or becoming Disabled, the Committee may approve, in its sole discretion, a pro rata payout to such Participant.

Section 11.3 Committee Certification and Authority. After the completion of each Performance Period, the Committee shall certify the extent to which any Performance Goal has been satisfied, and the amount payable as a result thereof, prior to payment, settlement or vesting of any Incentive Compensation Award subject to this Article 11. Notwithstanding any provision of the Plan, with respect to any Incentive Compensation Award subject to this Article 11, the Committee may adjust downwards, but not upwards, the amount payable pursuant to such Award. The Committee shall have the power to impose such other restrictions on Incentive Compensation Awards subject to this Article 11 as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements for “performance-based compensation” within the meaning of Section 162(m).

Section 11.4 Annual Award Limits . Unless and until the Committee determines that an Award to a Participant shall not be designed to qualify as “qualified performance-based compensation”, as described under Section 162(m), the following limits (each an “Annual Award Limit” and, collectively, “Annual Award Limits”), as adjusted pursuant to Section 3.2, shall apply to grants of such Awards under this Plan:


(a)	Options. The maximum aggregate number of shares of Stock subject to Options granted to any one Participant in any one calendar year shall be 1,000,000 shares, determined as of the date of grant.


(b)	Restricted Stock and Restricted Stock Units. The maximum aggregate number of shares of Stock subject to Restricted Stock and Restricted Stock Units granted to any one Participant in any one calendar year shall be 500,000 shares, determined as of the date of grant.

(c)

Incentive Compensation Award and other cash-based Awards. The maximum aggregate amount that may be paid to any Participant in any calendar year under an Incentive Compensation Award or any other Award that is payable or denominated in cash, in each case that the Committee has determined shall be designed to qualify as qualified performance-based compensation, shall be $5,000,000 determined as of the date of payout (for avoidance of doubt, this limit applies in the aggregate to all forms of Awards subject to this clause (c)). The foregoing maximum shall apply to any Performance Period that is equal to a fiscal year of the Corporation, which maximum shall be adjusted to the corresponding fraction or multiple of that amount for any Performance Period of a different duration. To the extent that any form of Award subject to this clause (c) is to be settled in shares of Stock, either pursuant to the discretion of the Committee or at the election of the applicable Participant, compliance with the limit established by this clause (c) shall be determined by calculating the dollar value of the shares of Stock to be issued in settlement based on the Fair Market Value of such shares of Stock as of the applicable settlement date.

(d)

Section 162(m) Bonus Pool. At the determination of the Committee, within the first ninety (90) days of the respective Performance Period, the Committee may adopt a Section 162(m) cash bonus pool, based upon a designated percentage of one of the financial measures included in the definition of “Performance Goals” (e.g., 3% of adjusted pretax income). Such adoption shall include an allocation of the cash bonus pool to Participants who are bonus pool participants for that Performance Period (totaling no more than 100% of the pool). At the end of the Performance Period, the Committee will verify the actual pool dollars and may exercise negative (but not positive) discretion in the determination of the actual bonus to be paid to each respective bonus pool participant for that Performance Period; provided, however, the allocation shall satisfy the maximum limits set forth in clause (c) above.

--------------------------

Exhibit B

Benefits At a Glance

At the Chicago Board Options Exchange, we believe that benefits play a crucial role in an individual’s decision to join and stay with our organization. Based on this belief, we constantly review our programs to ensure that they are competitive and cost effective. The following summarizes the programs offered to full-time employees.

MEDICAL INSURANCE


•	Full-time employees and their dependents are eligible the day after completion of one month of continuous employment.


•	Eligible dependents include your spouse and or your Domestic Partner/Civil Union Partner and dependent child(ren) under the age 26 as well as unmarried military veteran dependents who are Illinois residents and under the age of 30.



	Blue Cross Blue Shield PPO B		Blue Cross Blue Shield PPO/HSA
Benefit	In-Network	Out-of-Network	In-Network	Out-of-Network
Deductible:
Individual	$750	$1,500	$1,500	$3,000
Family	$2,000	$4,000	$3,000*	$6,000*
Out-of-Pocket Limit:
Individual	$2,500	$5,000	$3,000	$6,000
Family	$5,000	$10,000	$6,000	$12,000
Lifetime Maximum			Unlimited
Coinsurance	80%	60%	80%	60%
Physician Office Visit
Primary Care Physician	80%	60%	80%	60%
Specialist	80%	60%	80%	60%
Preventive Care	100%	100%	100%	100%
Hospital Services
Deductible per admission	$200	$200	80% / after deductible	60% / after deductible
Inpatient	80%	60%	80%	60%
Outpatient	80%	60%	80%	60%
Emergency Care	100% /no deductible		100% /after deductible
Mental Health/ Substance Abuse
Deductible per admission	$200 (applies towards the deductible)		80% / after deductible	60% / after deductible
Inpatient	80%	60%	80%	60%
Outpatient	80%	60%	80%	60%
Other Covered Services	80%		80% /after deductible

*Note : The PPO/HSA family deductible is an aggregate deductible. For example, if one family member meets the $3,000 deductible the entire family has met it for the year. The minimum HSA deductible is mandated by law and may be adjusted annually.

As of 07/01/2016 1

PRESCRIPTION DRUG PLAN

The chart below provides employee co-payments for prescriptions. Prescription coverage is administered by Express Scripts.



PPO Plan B:	Generic	Single Source Brand	Multi Source Brand
Retail 30	$10.00	10% Co-insurance $25.00 Minimum $50.00 Maximum	10% Co-insurance $40.00 Minimum $80.00 Maximum
Advantage 90	$20.00	10% Co-insurance $50.00 Minimum $100.00 Maximum	10% Co-insurance $80.00 Minimum $160.00 Maximum
Mail Order	$20.00	10% Co-insurance $50.00 Minimum $100.00 Maximum	10% Co-insurance $80.00 Minimum $160.00 Maximum
PPO/HSA Plan	Prior to meeting the PPO/HSA deductible ($1,500 single & $3,000 family), you will be responsible for paying the total cost of the prescription - of which is reimbursable from the HSA. After meeting the deductible, the plan will then pay 80% of the cost. Once the Out-of-Pocket limit ($3,000 for individual & $6,000 for family) has been satisfied, the plan will pay 100% of the cost.

EASY TO USE HEALTH CARE RESOURCES & TOOLS

As a health care consumer, you are encouraged to take charge of your health with the easy-to-use tools provided by Blue Cross Blue Shield of Illinois through Blue Access for Members (http://www.bcbsil.com/login.html) a few of which are noted below.


•	Ask your physician questions about treatments and tests


•	Use the Blue Star Hospital Report to learn information about hospital quality and safety


•	Use the 24/7 Nurse line to assist with questions regarding health problems or concerns. It is staffed by registered nurses who are available 24 hours a day, 7 days a week. Call (800) 299-0274.


•	Use the Cost Estimator to obtain estimated costs of various medical procedures


•	Use the My Health section of Blue Access for Members to make more informed health care decisions by reading about health and wellness topics and research specific conditions

Express Scripts also offers an easy to use website (http://express-scripts.com/) to assist you in making the best financial choices in purchasing medications. You can also download the Express Scripts Smartphone application which can assist patients to make decisions regarding prescriptions with their physician while still in the exam room:


•	To determine if a drug requires prior authorization


•	To check drug interaction using real time information


•	Send alerts so you never miss a dose or refill

Keep in mind that you can also save money by using mail order.

DENTAL INSURANCE

Eligibility


•	Full-time employees are eligible the day after completion of one month of continuous employment.


•	Eligible dependents include your spouse and or your Domestic Partner/Civil Union Partner and dependent child (ren) not married under the age 26 as well as unmarried military veteran dependents who are Illinois residents and under the age of 30.

As of 07/01/2016 2

DENTAL INSURANCE (cont’d.)


•	If dental coverage is waived, the waiver will stay in effect for 2 years. You will not be eligible to enroll until the next Open Enrollment period following the 2 year period unless you have a qualifying event.



Coverage Type	Coverage Description	In-Network	Out-of-Network		Annual Deductible
A	Preventative	100%	100%		N/A
B	Basic Restorative	100%	80%		$50 Individual/$100 Family
C	Major Restorative	50%	50%		$50 Individual/$100 Family
D	Orthodontia	50%*	50%*		N/A
Maximum Annual Benefit		$1,250**		$1,000**

* Orthodontia has a lifetime maximum benefit of $1,000 for dependents age 19 and under.

** One annual deductible for total services - Basic and/or Major.

Dental coverage is administered by MetLife. Use of a MetLife participating dentist may allow you to receive greater benefits and pay less for your dental treatment versus the use of non-participating dentist.

2016 Medical & Dental Insurance Employee Contribution Schedule Per Pay Period

Contributions change in January of each calendar year



Coverage Level	PPO Plan B	PPO/HSA	Dental Plan
Employee	$80.53	$60.41	$9.38
Employee + Spouse	$165.08	$129.75	$18.75
Employee + Child(ren)	$148.97	$117.09	$19.25
Family	$289.89	$227.85	$33.75

HEALTH SAVINGS ACCOUNT (HSA)

When enrolling in the PPO/HSA plan, you have an option to contribute to a Health Savings Account which allows:


•	tax free contributions,


•	tax free earnings,


•	tax free withdrawals when used for qualified medical expenses, and


•	the ability to rollover contributions from year to year.

To take advantage of an HSA:


•	you must be enrolled in the high deductible plan (PPO/HSA),


•	you cannot be covered under other health insurance,


•	you cannot be enrolled in Medicare or Medicaid,


•	you cannot be claimed as a dependent on another individual’s tax return and


•	you do not have a spouse with a health FSA or Health Reimbursement Account that could reimburse your medical expenses.

FLEXIBLE SPENDING ACCOUNTS


•	Full-time employees hired in the current year are eligible after completion of one month of continuous employment.


•	Annual open enrollment is held each fall for coverage effective January 1st. Current participants must re-enroll each year.

Medical Spending Account

Up to $2,550 per year can be set aside on a pre-tax basis to pay for unreimbursed medical & dental expenses such as deductible, copayments, vision, and orthodontia expenses for employee or other eligible dependents.

As of 07/01/2016 3

FLEXIBLE SPENDING ACCOUNTS (cont’d.)

Dependent Care Spending Account:

Up to $5,000 can be set aside on a pre-tax basis to pay your dependent care expenses such as day care and nursery school for children or other eligible dependents.

Limited Purpose FSA - PPO/HSA

If you enroll in PPO/HSA, if desired, you may enroll in both a HSA and the Limited Purpose FSA. The Limited Purpose FSA allows you to reimburse yourself for eligible dental and vision expenses and eligible medical expenses once you have met the PPO/HSA deductible.

The following compares a Health Savings Account to a Flexible Spending Account. If you enroll in the PPO/HSA, it is possible to enroll in both.



	CBOE Health Savings Account	CBOE Flexible Spending Account
Tax free contributions	Yes	Yes
Limits	Individual: $3,350 Family: $6,750	Individual: $2,550 Family: $2,550
Annual Catch up Contribution age 55+	$1,000	No
Earnings on Contributions	Yes	No
Carry over contributions year to year	Yes	No
Portable	Yes	No
Cash outs if no medical expenses	Yes but if before age 65 subject to a 20% penalty	No
Account can be used for out-of-pocket and unreimbursed medical expenses	Yes- HSA Qualified Expenses	Yes - FSA Allowable Expenses

HEALTH CLUB DISCOUNTS

To encourage your healthy lifestyle, CBOE has negotiated discounted rates for individual memberships with several health clubs. Each offers a variety of services and locations.



Health Club	Negotiated Monthly Cost	Your Monthly Cost Less $35 Reimbursement
BCBS Fitness Program	$25	$0
XSport Fitness	$35	$0
Bottom Line Yoga	$69	$34
Lifetime Fitness	$63 - $110*	$28 - $75
Buckingham Athletic Club	$100**	$65
Chicago Athletic Club	$65***	$30

All rates are subject to change.

* Range is based on club location.

** Rate contingent on a certain number of employees enrolling

***$65/month with 12-month commitment; cost is $75 with no annual commitment

As noted above with BCBS Fitness Program, our medical plan provider Blue Cross Blue Shield, allows access to a network of fitness centers for a low monthly fee of $25. If you are enrolled in a health plan through Blue Cross, no contract is required. With the $35 CBOE reimbursement, your net cost can be $0. To learn more about the facilities in the Blue Cross network sign in to Blue Access for Members (http://www.bcbsil.com/login.html) and click “Fitness Program.”

As of 07/01/2016 4

HEALTH CLUB DISCOUNTS (cont’d.)

All full-time employees are eligible to receive a Health Club reimbursement after completion of one month of continuous service. CBOE will reimburse you up to $35/month toward the cost of any health club , if you meet the following requirements::


•	Full-time employee with at least one month of continuous service.


•	Completion of a Health Assessment (HA) each calendar year. To complete the HA go to Blue Access for Members click “Health Assessment”. You can provide proof of completion of your HA by stopping by Human Resources and logging on to Blue Access for Members (BAM) or by sending a screen shot of “My Assessments” in BAM to CBOEHR@cboe.com.


•	Submit your monthly invoice unless you are a member of Buckingham Athletic Club or Lifetime Fitness.


•	Reimbursements occur on a semi-annual basis at the end of June and December.


•	Be an active employee at the time the reimbursement occurs. Please note the reimbursement is considered a taxable benefit.

EMPLOYEE ASSISTANCE PROGRAM

All employees and their eligible dependents are eligible immediately upon hire. The employee assistance program is administered by Metropolitan Family Services.

Benefits


•	Three counseling sessions per year paid by the Exchange


•	The employee is responsible for cost of any additional counseling (Note: Additional mental health services and substance abuse rehabilitation services may be available under the terms of your individual health care plan.)


•	A wide range of confidential counseling services are available, including but not limited to marriage, family, emotional, financial and legal problems, and drug dependence.


•	Child & elder care

You can contact EAP by calling (800)-905-0994 or by logging on to the website at mfs.advantageengagement.com and entering CBOE as your company code.

LIFE AND AD&D

Eligibility


•	Full-time employees are eligible after completion of one month of continuous employment.

Group Term Life


•	Equal to 3 times annual salary rounded to the nearest $500


•	Maximum benefit is $300,000. If you are age 65 but under age 70, your benefit will be reduced to 65%. If you are age 70 or older, your maximum benefit is reduced to 50% of the maximum coverage amount.


•	CBOE pays the entire premium, however coverage over $50,000 is taxable.

Dependent Life


•	$2,500 benefit for spouse


•	$1,000 benefit for each unmarried dependent child from birth through 21 years old or through 23 years old if full-time student.

Accidental Death & Dismemberment


•	Employee coverage only


•	Equal to and in addition to the life insurance benefit. Payable if death is the result of an accident.


•	Portions of this benefit are payable for accidental loss of eyesight, hands, feet.

SHORT-TERM DISABILITY

As of 07/01/2016 5

Eligibility


•	Full-time employees are eligible after 12 months of employment

Benefits


•	100% salary continuance for a maximum of 26 weeks


•	Commences after the fifth work day of consecutive disability

LONG-TERM DISABILITY

Eligibility


•	Full-time employees are eligible after one year of employment.


•	Employees earning $50,000 per year or more are eligible immediately.

Benefits


•	After 180 days of consecutive disability (26 weeks)


•	66 2/3 of basic monthly earnings with a maximum monthly benefit of $20,000


•	For disabilities that begin before age 60, maximum benefits are to age 65. Age 60 and after, maximum benefits depend on age at start of disability

Cost


•	Contributions are not required by employees earning less than $50,000 per year.


•	The annual premium for those employees earning more than $50,000 is .527 per $100 in salary which is deducted on a per pay period basis.

The following table illustrates how to calculate your deduction:



Annual Salary	LTD Covered Salary	Pay Period Deduction
$100,000	Annual Salary divided by 12 $8,333.34	(Covered Salary/100*.527)/divided by 2 $21.96

SMART PLAN RETIREMENT PLAN

Eligibility

Full-time employees are eligible to participate upon hire. All employees will be automatically enrolled into the Plan. Employees will be notified approximately 30 days prior to their first automatic deduction. The automatic deduction will be 4% of your pre-tax wages. Employees may change this contribution any time.

Employee Contributions


•	Pre-Tax Contributions - from 1 - 50%


•	After-Tax Contributions - from 1 - 10%


•	The total combined maximum is 50%

Company Contributions

The first of the month following completion of one year of continuous full time service, CBOE contributes $2 for each $1 of the first 4% of pay which you contribute to the Plan on a pre or post tax basis.

As of 07/01/2016 6

SMART PLAN RETIREMENT PLAN (cont’d.)

Vesting

The vesting schedule is calculated on years of service as shown in the following chart:



1 year	20%
2 years	40%
3 years	60%
4 years	80%
5 years or more years	100%

You are always 100% vested in your own contributions and their earnings.

Investment Elections

Fidelity is the recordkeeper for the Smart Plan. Investment fund choices include:


•	Fidelity Retirement Money Market Portfolio


•	Managed Income Portfolio II Class I


•	American Century Inflation Adjusted Bond Fund Class Institutional


•	Fidelity Investment Grade Bond Fund


•	Fidelity Capital & Income Fund


•	Invesco Van Kampen Growth and Income Fund R6


•	Spartan 500 Index - Institutional Class


•	Fidelity Low-Priced Stock Fund: Class K


•	Goldman Sachs Small Cap Value Class R6


•	Fidelity Contrafund: Class K


•	Fidelity OTC Portfolio: Class K


•	Harbor Capital Appreciation Fund Institutional Class


•	Baron Asset Fund Institutional Class


•	Lord Abbett Developing Growth Fund Class R6


•	Columbia Acorn International Fund Class Y


•	Templeton Foreign Fund R6


•	Wells Fargo Advantage Emerging Market Equity Fund R6


•	Fidelity Freedom Income Fund: Class K


•	Fidelity Freedom Funds: Class K (12 funds)


•	Fidelity Asset Manager 50%


•	Brokerage Link Account - This account offers investment alternatives in securities other than listed above and is available to qualified participants.

EDUCATIONAL ASSISTANCE

Eligibility


•	Full-time employees are eligible for tuition reimbursement after completion of 6 months of employment.

Highlights


•	Institution must be accredited by the North Central or the Independent Association of Colleges and Secondary Schools


•	75% reimbursement of tuition for grades of A, B, C or Pass


•	Lab, late registration and book fees are not reimbursable


•	Undergraduate degrees must be job or business related


•	Graduate degrees and certification programs must be job related


•	Required undergraduate courses that are not job related are only reimbursable after a two year waiting period

Maximum $10,000 per year

As of 07/01/2016 7

PAID TIME OFF

Vacation Days

You are eligible for a pro-rated amount of vacation days during your first year of employment based upon your date of hire. Newly hired employees may not use vacation time until they have completed six (6) months of continuous service. Thereafter, the following vacation is accrued based upon years of service as of 12/31:



Less than 3 years	10 days
3 - 8 years	15 days
9 - 13 years	20 days
14 or more years	25 days

Personal Leave Days (PL Days)

You are eligible to earn a pro-rated amount of PL days during your first year of employment based upon your date of hire. In a full calendar year, employees can earn a maximum 7 PL days. You will earn .2916 PL days on a semi-monthly basis. Newly hired employees may not use PL days until they have completed three (3) months of continuous service.

TRANSPORTATION PROGRAM

Eligibility


•	Full-time employees are eligible to participate upon hire.

Highlights:


•	Eligible costs for the program are expenses you incur traveling to and from work while using mass transportation (i.e. Metra, CTA, Pace, etc.)


•	Only employee expenses can be set aside on a pre-tax basis, not the transportation expenses of family members.


•	You may enroll, cancel participation or change the amount of a deduction by the 6th of each month.

Transit Pass or Ventra


•	You may contribute any amount between ten dollars ($10) and once hundred and twenty-seven dollars and fifty cents ($127.50), on a pre-tax/semi-monthly basis.


•	You may also contribute on a post-tax basis.

Ventra Card


•	Ventra is the CTA’s and Pace’s fare payment system that will make it faster and easier to access transit throughout the region. A one-time Ventra Card purchase fee of $5 is immediately refunded as a transit value upon registration.


•	You may purchase a 30- day for $100. The 30-day is valid for 30 consecutive days from the date and time of the first use.


•	You may purchase Ventra to be used on a pay-per-use basis of increments in $10, $20, $30, $35, $45, $50, $60, $70, $80, $100, $120, $140 and $150.


•	The contribution is deducted on a semi-monthly basis.


•	Only whole monthly contribution amounts can be posted to the account.

The information contained in this document is intended to provide a brief overview. If there is any conflict between this summary and the plan documents, and/or insurance contracts that govern the plan, the documents or contracts will prevail. CBOE reserves the right to change the provision of any benefit plan at any time.

As of 07/01/2016 8

Exhibit C

CBOE HOLDINGS, INC. EXECUTIVE SEVERANCE PLAN

As Amended and Restated Effective January 1, 2015

(And Summary Plan Description)

Article 1. Establishment and Term of the Plan

1.1 Establishment of the Plan. The Corporation established the CBOE Holdings, Inc. Executive Severance Plan effective on January 1, 2011 (the "Plan"). The Plan has been amended from time to time thereafter including this complete amendment and restatement effective January 1, 2015. The purpose of the Plan is to provide Severance Benefits to certain eligible executives of the Corporation and its Affiliates in accordance with the terms of the Plan. No individuals other than the Executives shall be eligible to receive Severance Benefits. Severance Benefits for the Executives will be determined exclusively under the Plan.

The Plan, as set forth herein, is an employee welfare benefit plan within the meaning of ERISA Section 3(1), and the Corporation intends that the Plan be administered in accordance with the applicable requirements of ERISA. This Plan document, including the information provided in Appendix B hereto, is also the summary plan description of the Plan.

1.2 Plan Term. The Plan became effective on January 1, 2011, has been amended from time to time thereafter including this complete amendment and restatement effective January 1, 2015, and shall continue in effect until terminated by the Corporation, subject to Section 8.1 herein.

1.3 Administration. The Plan Administrator is the named fiduciary of the Plan. The Plan Administrator may appoint, as it deems necessary or advisable, an individual or committee to act as its representative in matters affecting the Plan. The Plan Administrator shall have authority to control and manage the operation and administration of the Plan in good faith, and may adopt rules and regulations consistent with the terms of the Plan and necessary or advisable to administer the Plan properly and efficiently. In administering the Plan and providing Severance Benefits prior to a Change in Control, the Plan Administrator shall have discretionary authority to construe and interpret the Plan's terms and to make determinations under it, including the authority to determine, in good faith, an individual's eligibility for Severance Benefits, the reason for employment termination, and the amount of Severance Benefits payable, in accordance with the terms of the Plan. Any such interpretation of the Plan made in good faith by the Plan Administrator, and any decision made in good faith on any matter within the discretion of the Plan Administrator under the Plan, will be binding on all persons, subject to review under Article V. In administering the Plan and providing Severance Benefits on or after a Change in Control, the Plan Administrator shall make initial determinations of entitlement to benefits and the amounts thereof in good faith and in accordance with the terms of the Plan, subject to review under Article V.

Article 2. Definitions

Wherever used in the Plan, the following terms have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized:

"Affiliate" means a Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the Corporation. For purposes of the preceding sentence, the word "control" (by itself and as used in the terms "controlling," "controlled by" and "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.

"Base Salary" means, at any time, the then regular annual base rate of pay that the Employer is paying the Executive as annual salary, as approved by the Board or a committee of the Board and shown in the Employer's records (disregarding any reduction constituting Good Reason, if the Executive's Involuntary Termination is for such Good Reason). Base Salary does not include any incentive, non-cash, equity or similar compensation or award, or Retirement Benefit Plan or Health and Welfare Benefit Plan contributions made by the Corporation or an Affiliate.

"Board" means the Board of Directors of the Corporation.

"Cause" shall be deemed to exist if, and only if:

(a) During the performance of the Executive's duties, he or she is found, in either a judicial or quasi-judicial proceeding as the case may be, after all rights of appeal have been exhausted or waived, to have committed any deliberate

act(s) or omission(s) constituting dishonesty, intentional breach of fiduciary obligation, or intentional wrongdoing or malfeasance that result in material harm to the Employer. The determination of material harm to the Employer shall be based on definite proof and not mere allegations, conjecture, or remote possibilities; or

(b) The Executive willfully fails to obey or refuses to comply with a lawful and proper direction of the Board or the Corporation's Chief Executive Officer or Chief Operating Officer, which direction is consistent with normal business practices and relates to the Executive's performance of his or her duties and which failure to obey or refusal to comply remains uncured for 30 days after the Executive receives written notice specifying the failure to obey or refusal to comply and affording the Executive an opportunity to be heard in connection therewith, and the Executive either fails to remedy such failure to obey or refusal to comply within 30 days from receipt of such written notice or fails to take all reasonable steps to that end during such 30-day period and thereafter.

"Change in Control" means the first to occur of the following, with respect to each Executive individually:

(a) The acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of voting securities of the Corporation where such acquisition causes such Person to own 35% or more of the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the " Outstanding Voting Securities "); provided that for purposes of this paragraph (a), the following acquisitions will not be deemed to result in a Change in Control: (i) any acquisition directly from the Corporation, (ii) any acquisition by the Corporation, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any Affiliate or (iv) any acquisition by any corporation or entity pursuant to a transaction that complies with clauses (A), (B) and (C) of paragraph (c) of this definition below; and provided further that if any Person's beneficial ownership of the Outstanding Voting Securities reaches or exceeds fifty percent (50%) as a result of a transaction described in clause (i) or (ii) above, and such Person subsequently acquires beneficial ownership of additional voting securities of the Corporation, such subsequent acquisition will be treated as an acquisition that causes such Person to own thirty-five (35%) or more of the Outstanding Voting Securities;

(b) Individuals who, as of the Effective Date, constitute the Board (the " Incumbent Board ") cease for any reason to constitute at least a majority of the Board, provided that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Corporation's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(c) The approval by the stockholders of the Corporation and consummation of (i) a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of the Corporation or (ii) the acquisition of assets or stock of another corporation in exchange for voting securities of the Corporation (each of (i) and (ii), a " Business Combination "); excluding, however, such a Business Combination pursuant to which (A) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that as a result of such transaction owns the Corporation or all or substantially all of the Corporation's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Voting Securities, (B) no Person (excluding any employee benefit plan (or related trust) of the Corporation or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly (except to the extent that such ownership existed prior to the Business Combination), an amount of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation representing twenty percent (20%) thereof; and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(d) Approval by the stockholders of the Corporation of a complete liquidation or dissolution of the Corporation.

which the Executive is a participant in a capacity other than solely as an officer, employee, or director of the Corporation or an Affiliate.

" Change in Control Period " means the period commencing on the occurrence of a Change in Control and ending on the second anniversary of the Change in Control, provided that if the Change in Control is a change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation, as described in Treasury Regulation §1.409A-3(i)(5), then the Change in Control Period shall also include the period beginning six (6) months prior to the occurrence of the Change in Control and ending on the Change in Control.

"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985 and the regulations thereunder, as amended from time to time.

"Code" means the U.S. Internal Revenue Code of 1986 and the regulations thereunder, as amended from time to time.

"Corporation" means CBOE Holdings, Inc., a Delaware corporation, and any successor thereto as provided in Article 6 herein.

"Effective Date" means January 1, 2015, the date this complete amendment and restatement of the Plan became effective.

"Employer" means the Corporation or Chicago Board Options Exchange, Incorporated ("CBOE"), which employs the Executive.

"ERISA" means the Employee Retirement Income Security Act of 1974 and the regulations thereunder, as amended from time to time.

"Exchange Act" means the Securities Exchange Act of 1934 and the regulations thereunder, as amended from time to time.

"Executive" means an eligible employee of the Employer designated from time to time by the Corporation and set forth on Appendix A or Appendix C hereto, as amended from time to time. No individuals other than those set forth on Appendix A or Appendix C hereto at the time of employment termination will be eligible to receive Severance Benefits.

"Good Reason" shall be deemed to exist if, and only if, without the Executive's express written consent:

(a) The Employer assigns to the Executive authorities, duties or responsibilities (including officer titles) that are inconsistent in any material and adverse respect with the Executive's current authorities, duties or responsibilities with the Employer (including any material and adverse diminution of such authorities, duties or responsibilities);

(b) The Employer materially reduces the Executive's base compensation;

(c) The Employer requires the Executive to relocate the Executive's principal business office or principal place of residence outside the Chicago metropolitan area, or assigns to the Executive duties that would reasonably require such relocation; or

(d) The Employer materially breaches the terms of any agreement pursuant to which services are provided by the Executive.

The Executive may terminate the Executive's employment at any time for Good Reason as of a date at least thirty (30) days after the date the Executive delivers written notice of such termination to the Corporation, unless the condition constituting Good Reason is fully corrected within thirty (30) days after the Executive gives the Corporation written notice thereof. The Executive must deliver to the Corporation written notice of such termination, if any, within sixty (60) days of the event constituting Good Reason, setting forth in reasonable detail the specific conduct of the Corporation that constitutes Good Reason and the specific provisions of the Plan on which the Executive relies.

"Health and Welfare Benefit Plan" means (a) any health and dental plan, disability plan, accidental death and dismemberment plan, survivor income plan, and life insurance plan or arrangement made available by the Employer for its executives, and (b) any such additional or substitute plan or arrangement that the Employer may make available in the future and during the term of the Plan for its executives, in each case that is a "welfare plan" (as such term is defined in ERISA Section 3(1)).

"Involuntary Termination" has the meaning given to such term in Section 3.2 herein.

"LTIP" means the CBOE Holdings, Inc. Long-Term Incentive Plan, or any similar or successor plan.

"Person" has the meaning given to such term in Sections 13(d) and 14(d)(2) of the Exchange Act.

"Plan" means this CBOE Holdings, Inc. Executive Severance Plan, as amended and restated effective January 1, 2015, including the Appendices that are attached hereto and made a part hereof.

"Plan Administrator" means the Compensation Committee of the Board, or its delegate.

"Plan Year" means the 12-month period that begins each January 1 and ends on the next December 31.

"Pro-Rated Severance Payment" has the meaning given to such term in Section 3.3(A)(b) herein.

"Release" has the meaning given to such term in Section 3.6 herein.

"Retirement Benefit Plan" means (a) any qualified or non-qualified retirement, savings or deferred compensation plan, program or arrangement currently made available by the Employer for its executives, and (b) any such additional or substitute plan, program or arrangement that the Employer may make available in the future and during the term of the Plan for its executives, in each case that is a "pension plan" (as such term is defined in ERISA Section 3(2)).

"Salary and Bonus Payment" has the meaning given to such term in Section 3.3(A)(c) herein.

"SEC" means the United States Securities and Exchange Commission.

"Secret or Confidential Information" includes, but is not limited to, any and all records, notes, memoranda, data, writings, research, personnel information, customer information, clearing members' information, the Employer'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 Employer, that has not been published or disclosed to the general public, the options industry or the commodities futures industry, provided that such term does not include knowledge, skills, and information that is common to the trade or profession of the Executive.

"Severance Benefits" has the meaning given to such term in Section 3.3 herein.

Article 3. Severance Benefits

3.1 Eligibility for Severance Benefits. Subject to the conditions and limitations of the Plan, an Executive who experiences an Involuntary Termination shall be entitled to receive Severance Benefits as set forth below.

For purposes of the Plan, an Executive's employment with the Employer shall be deemed to be terminated when the Executive has a "separation from service" within the meaning of Code Section 409A, and references to termination of employment shall be deemed to refer to such a separation from service. Upon the Executive's separation from service for any reason, the Executive will be deemed to have resigned as of the date of the Executive's separation from service from all offices, directorships, and fiduciary positions with the Corporation, its Affiliates and employee benefit plans.

3.2 Involuntary Termination. The occurrence of either or both of the following events (an " Involuntary Termination ") shall entitle the Executive to receive Severance Benefits, subject to Section 3.3:

(a) The Employer's termination of the Executive's employment without Cause and for a reason other than death or Disability; or

(b) The Executive's termination of employment with the Employer for Good Reason.

3.3 Severance Benefits. (A) In the event that the Executive experiences an Involuntary Termination, the Employer shall provide the Executive (or the Executive's representative) with the following " Severance Benefits ":

(a) The Executive's " Accrued Benefits ," which include accrued but unpaid Base Salary (based upon the annual rate in effect on the date of employment termination) through the date of termination (payable in accordance with the Employer's normal payroll practice); business expenses incurred but not paid prior to the date of termination in accordance with the Employer's expense reimbursement policy; accrued but unused vacation through the date of termination; and other benefits mandated under the terms of any of the Employer's employee plans or programs;

(b) A lump sum cash severance payment in an amount equal to the Executive's target annual bonus for the Plan Year in which the Executive's employment terminates multiplied by a fraction, the numerator of which equals the number of calendar days the Executive was employed by the Employer for the Plan Year in which the Executive's employment terminates and the denominator of which is 365 (the " Pro-Rated Severance Payment "), payable within 30 days following the date of termination, subject to Section 3.6;

(c) A lump sum cash severance payment (the " Salary and Bonus Payment ") in an amount equal to the sum of (i) two times the Executive's annual rate of Base Salary (using the greater of Base Salary in effect on the Effective Date or on the date of the Executive’s termination of employment), and (ii) two times the Executive's target annual bonus for the Plan Year in which the Executive's employment is terminated, payable within thirty (30) days following the date of termination, subject to Section 3.6;

(d) Any unpaid bonus earned in any year prior to the year in which the Executive's employment terminates;

(e) The Salary and Bonus Payment will not be deemed compensation for purposes of any Retirement Benefit Plan, provided that the Salary and Bonus Payment will be deemed compensation for purposes of any tax-qualified Retirement Benefit Plan only to the extent permitted by the terms of such Retirement Benefit Plan and by applicable provisions of the Code; and

(f) The Employer shall pay the Executive's COBRA premiums (or an amount equal to the Executive's COBRA premiums) (sufficient to cover full family health care, if the Executive qualifies for and elects that coverage) for a period of eighteen (18) months following termination of the Executive's employment, if the Executive elects such COBRA coverage and, at the end of such period, if the Executive is eligible and elects to enroll in the Employer's retiree medical plan, if any, the Employer shall pay the Executive's premiums for such coverage for a period of six months. The Employer's obligation to pay the COBRA and retiree medical insurance premiums described in the preceding sentence will cease on the date the Executive becomes covered by another group health plan that does not impose pre-existing condition limitations on the Executive's coverage. Nothing in this Section 3.3(f) shall be construed to extend the period over which COBRA continuation coverage must be provided to the Executive or the Executive's dependents beyond that mandated by law.

(B) In the event that the Executive experiences an Involuntary Termination during the Change in Control Period, the Executive shall be entitled to receive, in addition to the Severance Benefits described in Section 3.3(A) above, a pro-rated amount, in cash, equal to the Executive’s target equity award under the LTIP, stated as a percentage of Base Salary, for the Plan Year in which the Executive’s employment terminates or, if greater, for the Plan Year immediately preceding the Plan Year in which the Change in Control occurs, multiplied by a fraction, the numerator of which is the number of calendar days the Executive was employed by the Employer for the Plan Year in which the Executive’s employment terminates and the denominator of which is 365, payable within thirty (30) days following the later of the Executive's date of termination or the Change in Control, subject to Section 3.6. The term "Severance Benefits" includes any benefits payable under this Section 3.3(B).

3.4 Termination for Cause or by the Executive Other Than for Good Reason. If the Executive's employment is terminated either (a) by the Employer for Cause or (b) by the Executive other than for Good Reason, the Employer shall pay the Executive any unpaid bonus earned in any year prior to the year in which the Executive's employment terminates and the Executive's Accrued Benefits (as defined in Section 3.3(A)(a)).

3.5 Notice of Termination. Any termination of the Executive's employment by the Employer for Cause or by the Executive for Good Reason shall be communicated by a written notice to the other party that indicates the specific termination provision in the Plan relied upon, and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated.

3.6 Release. Notwithstanding anything in the Plan to the contrary, as a condition to receiving any Severance Benefits, the Executive (or, in the event of the Executive's death or incompetence, the Executive's designated beneficiary, surviving spouse, estate, or legal representative) shall execute a comprehensive release agreement and waiver of claims against the Employer in a form substantially the same as that attached hereto as Appendix E (the " Release "). The Employer shall deliver the Release to the Executive within 10 days of the Executive's termination of employment. The Executive must deliver to the Employer an original, signed Release and the revocability period (if any) must elapse by the Release Deadline. For purposes of the Plan, the "Release Deadline"’ means the date that is sixty (60) calendar days after the Executive’s termination of employment. Payment of any Severance Benefits that are not exempt from Code Section 409A shall be delayed until the Release Deadline, irrespective of when the Executive executes the Release; provided, however, that where the Executive’s termination of employment and the Release Deadline occur within the same calendar year, the payment may be made up to thirty (30) days prior to the Release Deadline, and provided further that where the Executive’s termination of employment and the Release Deadline occur in two separate calendar

years, payment may not be made before the later of January 1 of the second year or the date that is thirty (30) days prior to the Release Deadline. If the Executive does not deliver an original, signed Release to the Employer within 45 days after receipt of the same from the Employer, (i) the Executive's rights shall be limited to those made available to the Executive as if the Executive were terminated under Section 3.4 above, and (ii) the Employer shall have no obligation otherwise to provide the Executive any Severance Benefits, or any other monies on account of the termination of the Executive's employment.

By accepting Severance Benefits, the Executive acknowledges and agrees that if the Executive files a lawsuit or accepts recoveries, payments or benefits based on any claims that the Executive has released under the Release, as a condition precedent for maintaining or participating in any lawsuit or claim, or accepting any recoveries, payments or benefits, the Executive shall forfeit immediately such Severance Benefits and reimburse the Employer for any Severance Benefits already provided.

3.7 State Unemployment Benefits. For purposes of state unemployment benefits, Severance Benefits shall be expressly deemed allocated over the two-year period following the termination of the Executive's employment, which two-year period is described in Section 3.3(A)(c), even if paid in a single lump sum.

3.8 No Further Obligations. Except as provided in the Plan or in any Retirement Benefit Plan or Health and Welfare Benefit Plan, the Employer shall not have any obligation to the Executive following the Executive's termination of employment for any reason, including any obligation for severance payments or benefits. Except as provided in the Plan, the provision of Severance Benefits shall have no effect upon the Executive's rights under any Retirement Benefit Plan, Health and Welfare Benefit Plan or other employee policy or practice of the Employer applicable to the Executive's termination for any reason.

3.9 Indemnification. The Corporation shall, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, indemnify and hold harmless any Executive in accordance with the terms and provisions of the Amended and Restated Certificate of Incorporation of CBOE Holdings, Inc. or CBOE, each as amended.

3.10 Special Provisions for the Termination of Certain Named Executives. If an Executive who is licensed to practice law is terminated, nothing in this Plan shall prohibit or restrict such Executive from providing legal advice and counseling, or other advice and counseling incidental thereto, as an officer, employee, consultant, independent contractor or otherwise, to an options exchange regulated by the SEC or to an alternative options trading system. Appendix D includes other special provisions for the termination of certain named Executives.

Article 4. Code Section 409A

4.1 The Plan is intended to comply with Code Section 409A, including the exceptions for short-term deferrals, separation pay arrangements, reimbursements, and in-kind distributions, and shall be administered, construed and interpreted in accordance with such intent.

4.2 Each payment under the Plan or any Employer benefit plan is intended to be treated as one of a series of separate payments for purposes of Code Section 409A.

4.3 To the extent any reimbursements or in-kind benefit payments under the Plan are subject to Code Section 409A, such reimbursements and in-kind benefit payments will be made in accordance with Treasury Regulation §1.409A-3(i)(1)(iv) (or any similar or successor provisions).

4.4 Notwithstanding anything in the Plan to the contrary, to the extent the Executive is considered a "specified employee" (as defined in Code Section 409A) at the time of his separation from service and would be entitled to a payment upon separation from service during the six-month period beginning on the Executive's date of termination that is not otherwise excluded under Code Section 409A under the exception for short-term deferrals, separation pay arrangements, reimbursements, in-kind distributions, or any otherwise applicable exemption, the payment will not be made to the Executive until the earlier of the six-month anniversary of the Executive's date of termination or the Executive's death and will be accumulated and paid on the first day of the seventh month following the date of termination.

4.5 The Corporation may amend the Plan to the minimum extent necessary to satisfy the applicable provisions of Code Section 409A.

4.6 The Employer cannot guarantee that the Severance Benefits provided under the Plan will satisfy all applicable provisions of Code Section 409A.

in which such payment is made. In the event a payment period straddles two (2) consecutive calendar years, the payment shall be made in the later of such calendar years.

4.8 The payment of any compensation or benefit that is subject to the requirements of Code Section 409A may not be accelerated except to the extent permitted by Code Section 409A.

Article 5. Claims Procedures

5.1 Claims Procedures. The Employer will provide Severance Benefits without the necessity of a formal written claim by the Executive. However, if any person believes he or she is being denied any rights or benefits under the Plan, such person (or the person's duly authorized representative) may file a claim in writing with the Plan Administrator within 90 days following the applicable Executive's date of termination. If any such claim is wholly or partially denied, the Plan Administrator will notify the claimant of its decision in writing. The notification will set forth, in a manner calculated to be understood by the claimant, the following: (a) the specific reason or reasons for the adverse determination, (b) reference to the specific Plan provisions on which the determination is based, (c) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary, and (d) a description of the Plan's review procedures and the time limits applicable to such procedures, including a statement of the claimant's right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review. Such notification will be given within ninety (90) days after the claim is received by the Plan Administrator, or within one hundred eighty (180) days, if the Plan Administrator determines that special circumstances require an extension of time for processing the claim. If the Plan Administrator determines that an extension of time for processing is required, written notice of the extension will be furnished to the claimant prior to the termination of the initial 90-day period. The extension notice will indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render a benefit determination.

5.2 Review Procedures. Within sixty (60) days after the receipt of notification of an adverse benefit determination, a claimant (or the claimant's duly authorized representative) may file a written request with the Plan Administrator for a review of the claimant's adverse benefit determination and submit written comments, documents, records, and other information relating to the claim for benefits. A request for review will be deemed filed as of the date of receipt of such written request by the Plan Administrator. A claimant will be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant's claim for benefits. The Plan Administrator shall take into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The Plan Administrator will notify the claimant of its decision on review in writing. Such notification will be written in a manner calculated to be understood by the claimant and will contain the following: (a) the specific reason or reasons for the adverse determination, (b) reference to the specific Plan provisions on which the benefit determination is based, (c) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant's claim for benefits, and (d) a statement of the claimant's right to bring a civil action under ERISA Section 502(a). The decision on review will be made within 60 days after the request for review is received by the Plan Administrator, or within 120 days if the Plan Administrator determines that special circumstances require an extension of time for processing the claim. If the Plan Administrator determines that an extension of time for processing is required, written notice of the extension will be furnished to the claimant prior to the termination of the initial 60-day period. The extension notice will indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the determination on review.

5.3 Disability Claims and Review Procedures. If a claim involves a "disability" determination, the claims and review procedures described in Sections 5.1 and 5.2 above will apply but the time limits will differ. The Plan Administrator will have 45 days to respond to the initial claim, and may extend the 45-day period by up to 30 days if an extension is necessary and the Plan Administrator notifies the Executive during the 45-day period of the reasons for the extension and the date by which the Plan Administrator expects to make a decision. The response deadline may be extended for an additional 30-day period if the Plan Administrator requires more time and notifies the Executive during the first 30-day extension period of the reasons for the extension and the date by which the Plan Administrator expects to make a decision.

The Executive will have 180 days after receiving a notice of adverse benefit determination involving a "disability" determination in which to submit a request for review of the adverse determination. The Plan Administrator shall reach a final decision and notify the Executive in writing of the decision within 45 days after the date it receives the Executive's request for review, provided that the Plan Administrator may extend the response time by up to an additional 45 days by notifying the Executive in writing of the extension.

of a denied claim. With respect to any decision or determination of the Plan Administrator that is or was made after a Change in Control, a reviewing arbitrator or court shall apply a de novo standard of review.

Article 6. Successors

6.1 Successors to the Corporation. The Corporation shall require any successor (whether direct or indirect, by purchase, merger, reorganization, consolidation, acquisition of property or stock, liquidation, or otherwise) of all or a significant portion of the stock or assets of the Corporation by agreement, to expressly assume and agree to maintain the Plan in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place, subject to Section 8.1 herein. Regardless of whether such agreement is executed, the Plan will be binding upon any successor in accordance with the operation of law and such successor shall be deemed the "Corporation" for purposes of the Plan.

6.2 Assignment by the Executive. The Plan will inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If the Executive dies while any Severance Benefits still would be owed to the Executive hereunder had the Executive continued to live, the Employer will continue to provide such Severance Benefits, unless otherwise provided herein, in accordance with the terms of the Plan to the Executive's beneficiary last designated by written instrument delivered by the Executive to the Employer prior to the date of death. If no such designated beneficiary survives the Executive, such amount must be paid to the Executive's surviving spouse, or if none, to the Executive's lawful descendants per stirpes then living, or if none survive the Executive, to the legal representative of the Executive's estate, or if none is appointed within 90 days of the date of death, to the Executive's heirs at law under the laws of the state in which the Executive is domiciled at the date of death.

6.3 Payment of Benefits in Case of Incompetency. If an Executive entitled to Severance Benefits becomes physically or mentally incapable of receiving or acknowledging such Severance Benefits, the Employer upon receipt of satisfactory evidence of such legal incapacity may, in its sole discretion, cause such Severance Benefits to be provided to some other person, persons, or institution on behalf of the Executive.

Article 7. Miscellaneous

7.1 Employment Status. The Plan is not a contract of employment, and eligibility under the Plan does not give the Executive the right to be rehired or retained in the employ of the Employer on a full-time, part-time or any other basis, or to receive any benefit under any other plan of the Employer. Eligibility under the Plan does not give the Executive any right, claim, or legal entitlement to any Severance Benefits, unless that right or claim has specifically accrued under the terms of the Plan.

7.2 No Reinstatement. By accepting Severance Benefits, the Executive waives any reinstatement or future employment with the Employer and agrees never to apply for employment or otherwise seek to be hired, rehired, employed, reemployed, or reinstated by the Employer.

7.3 Effect of Receiving Severance Benefits. Except as set forth in Appendix C, an Executive's receipt of Severance Benefits does not constitute any sort of extension or perpetuation of employment beyond the Executive's actual date of employment termination.

7.4 Ethical Standards. By accepting Severance Benefits, the Executive acknowledges and agrees that he or she has been given an adequate opportunity to advise the Employer's human resources, legal, or other relevant management division, and has so advised such division in writing, of any facts that the Executive is aware of that constitute or might constitute a violation of any ethical, legal or contractual standards or obligations of the Corporation or any Affiliate. The Executive further acknowledges and agrees that the Executive is not aware of any existing or threatened claims, charges, or lawsuits that he or she has not disclosed to the Employer.

7.5 Interests Not Transferable. The interests of persons entitled to Severance Benefits are not subject to their debts or other obligations and, except as may be required by the tax withholding provisions of the Code or any state's income tax act, or pursuant to an agreement between the Executive and an Employer, may not be voluntarily sold, transferred, alienated, assigned, or encumbered.

7.6 Entire Plan. The Plan contains the entire understanding of the Employer and the Executive with respect to the subject matter herein. The Severance Benefits shall be in lieu of and reduced by any severance, notice, termination pay or the like that may be payable under any plan or practice of the Employer, or that may be payable by any Federal, state, local, or foreign law, statute, regulation, ordinance, or the like (including the WARN Act or any similar state or foreign law). Any Severance Benefits will be offset against any severance, notice, or termination pay required to be paid by the Corporation or its Affiliates pursuant to federal, state, or local law or ordinance.

7.7 Conflicting Plans. The Plan supersedes any other generally applicable severance-related plan or policy of the Employer in effect on the date the Corporation adopts the Plan. Payments or benefits provided to an Executive under any Retirement Benefit Plan, Health and Welfare Benefit Plan or other employee benefit plan are governed solely by the terms of that plan. Any obligations or duties of an Executive pursuant to any separate non-competition or other agreement with an Employer will be governed solely by the terms of that agreement, and will not be affected by the terms of the Plan, except to the extent that agreement expressly provides otherwise. Severance Benefits are not taken into account for purposes of contributions or benefits under any other employee benefit plans, except as expressly provided therein or in Appendix C. Further, the period of coverage under any employee benefit plan is not extended due to the provision of Severance Benefits.

7.8 Notices. All notices, requests, demands, and other communications hereunder shall be sufficient if in writing and shall be deemed to have been duly given if delivered by hand or if sent by registered or certified mail to the Executive at the last address the Executive has filed in writing with the Employer or, in the case of the Employer, at its principal offices, with attention to the "Plan Administrator of the CBOE Holdings, Inc. Executive Severance Plan."

7.9 Tax Withholding. The Employer shall withhold from any Severance Benefits all Federal, state, city, or other taxes as legally required to be withheld, as well as any other amounts authorized or required by policy, including, but not limited to, withholding for garnishments and judgments or other court orders.

7.10 Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan must be construed and enforced as if the illegal or invalid provision had not been included. Further, the captions of the Plan are not part of the provisions herein and will have no force or effect.

Notwithstanding anything in the Plan to the contrary, the Employer shall have no obligation to provide any Severance Benefits to the Executive hereunder to the extent, but only to the extent, that such provision is prohibited by the terms of any final order of a Federal, state, or local court or regulatory agency of competent jurisdiction, provided that such an order shall not affect, impair, or invalidate any provision of the Plan not expressly subject to such order.

7.11 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein includes the feminine, the plural includes the singular and the singular includes the plural.

7.12 Applicable Law. To the extent not preempted by the laws of the United States, the laws of the State of Illinois will be the controlling law in all matters relating to the Plan without giving effect to principles of conflicts of laws. The jurisdiction and venue for any disputes arising under, or any action brought to enforce, or otherwise relating to, the Plan will be exclusively in the courts in the State of Illinois, Cook County, including the Federal Courts located therein (should Federal jurisdiction exist).

7.13 Action by Corporation. Any action required of or permitted to be taken by the Corporation under the Plan must be by written resolution of the Board, by written resolution of a duly authorized committee of the Board, by a person or persons authorized by resolutions of the Board, or by a duly authorized committee.

7.14 Plan Funding. The Employer will provide all Severance Benefits due and owing directly out of its general assets. To the extent that an Executive acquires a right to receive Severance Benefits, such right shall be no greater than the right of an unsecured general creditor of the Employer. Nothing herein contained may require or be deemed to require, or prohibit or be deemed to prohibit, the Employer to segregate, earmark, or otherwise set aside any funds or other assets, in trust or otherwise, to provide for any Severance Benefits.

Article 8. Amendment and Termination

8.1 Amendment and Termination. The Corporation reserves the right, on a case-by-case basis or on a general basis, to amend the Plan at any time and to thereby alter, reduce or eliminate any benefit under the Plan, in whole or in part, at any time; provided that

(a) No amendment or termination of the Plan that has the effect of (i) removing an Executive from the list of Executives Eligible to Participate in the Plan contained in Appendix A or Appendix C hereto, (ii) eliminating or reducing the amount of benefits payable (if any) to any Executive, or (iii) adversely affecting the benefits or rights of an Executive under the Plan, may be, without the express written consent of such Executive, retroactive or effective until the date that is two years after the later of (A) the date the Corporation adopts such amendment or termination or (B) the date the Corporation provides written notice of such amendment or termination to the affected Executive(s) (with the later of such dates referred to herein as the "Amendment Effective Date"); provided that any such amendment or termination shall not

eliminate or reduce any benefit with respect to any termination of employment that occurs on or before the Amendment Effective Date; and

(b) If a Change in Control occurs before the Amendment Effective Date, then the effective date of an amendment described in Section 8.1(a) or termination of the Plan shall be postponed as to the affected Executive(s) until the date that is one year after the Change in Control occurs. For the avoidance of doubt, if the Corporation amended the Plan (and gave notice) on January 1, 2012, to remove Executive A from the list of Executives Eligible to Participate in the Plan, a Change in Control occurred on December 1, 2013, and Executive A experienced an Involuntary Termination on September 1, 2014, Executive A would be entitled to Severance Benefits under the Plan under the terms and conditions of the Plan in effect immediately prior to January 1, 2012. Furthermore, if a Change in Control occurred on December 1, 2013 and Executive B was terminated by his Employer or a successor employer without Cause, or if he resigned for Good Reason, at any time within the twelve (12) month period following the Change in Control, then Executive B would be entitled to Severance Benefits under the Plan under the terms and conditions of the Plan in effect on December 1, 2013, subject to the provisions of this Section 8.1(b).

8.2 Notice of Amendment or Termination. The Corporation will notify the Executives, including, but not limited to, Executives receiving Severance Benefits, of any material amendment or termination of the Plan within a reasonable time.

Appendix A

Executives Eligible to Participate in the

CBOE Holdings, Inc. Executive Severance Plan

As Amended and Restated Effective January 1, 2015

Gerald T. O’Connell

Edward L. Provost

Alan J. Dean

Philip M. Slocum

Joanne Moffic-Silver

No amendment or termination of the Plan that has the effect of removing an Executive from this Appendix A may be, without the express written consent of such Executive, (a) effective until the date that is two years after the later of adoption of such amendment or termination or written notice of such amendment or termination to the affected Executive(s), or (b) retroactive; provided that any such amendment or termination shall not eliminate or reduce any benefit with respect to any termination of employment that occurs on or before such amendment or termination becomes effective.

Appendix B

Additional Information for Summary Plan Description

This Appendix B, together with the Plan document, constitutes the summary plan description of the Plan. References in this Appendix B to "you" or "your" are references to the Executive. Any term capitalized but not defined in this Appendix B will have the meaning set forth in the Plan.

Your Rights Under ERISA

As a participant in the Plan, you are entitled to certain rights and protections under ERISA. ERISA provides that all Plan participants shall be entitled to:


•	Receive information about the Plan and benefits offered under the Plan.


•	Examine, without charge, at the Plan Administrator's office and at other specified locations, all documents governing the Plan, and a copy of the latest annual report filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefit Security Administration.


•	Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan, and copies of the latest annual report and updated summary plan description. The Plan Administrator may make a reasonable charge for the copies.

Prudent Action by Plan Fiduciaries

In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate your Plan, called fiduciaries of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including the Employer, or any other person, may fire you or otherwise discriminate against you in any way to prevent you from exercising your rights under ERISA.

Enforce Your Rights

If your claim for a benefit is denied or ignored in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of Plan documents or the latest annual report from the Plan and do not receive them within 30 days, you may file suit in a Federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for benefits that is denied or ignored, in whole or in part, you may file suit in a state or Federal court. If you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

Assistance With Your Questions

If you have any questions about the Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You also may obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

General Plan Information



Plan Sponsor:	CBOE Holdings, Inc. 400 South LaSalle Street Chicago, Illinois 60605
Plan Name:	CBOE Holdings, Inc. Executive Severance Plan
Type of Plan:	Welfare plan
Source of Funds:	The Employer will pay all benefits due and owing under the Plan directly out of its general assets. To the extent that an Executive acquires a right to receive benefits under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Employer.
Plan Number:	506
Corporation's Employer Identification Number:	36-2730838
Plan Administrator:	CBOE Holdings, Inc. 400 South LaSalle Street Chicago, Illinois 60605 (312) 786-5600
Agent for Service of Legal Process:	Plan Administrator
Plan Year:	Calendar Year (January 1 - December 31)
Successors:	The Corporation shall require any successor (whether direct or indirect, by purchase, merger, reorganization, consolidation, acquisition of property or stock, liquidation, or otherwise) of all or a significant portion of the stock or assets of the Corporation by agreement, to expressly assume and agree to maintain the Plan in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place. Regardless of whether such agreement is executed, the Plan will be binding upon any successor in accordance with the operation of law and such successor shall be deemed the "Corporation" for purposes of the Plan.
Binding Legal Contract:	This Plan shall be a binding legal contract between the Employer and the Executive.

Appendix C

Executives Eligible to Receive Death and Disability Termination Benefits,

and Subject to Restrictive Covenants

Under the CBOE Holdings, Inc. Executive Severance Plan

C.1 Executives Eligible under Appendix C.

Gerald T. O’Connell

Edward L. Provost

C.2 Death Benefits. If the Executive dies while employed, the Employer shall provide the following " Death Benefits " following the date of death, subject to Section 3.6: (a) the Executive's Base Salary through the date of death, (b) the Pro-Rated Severance Payment, and (c) the Salary and Bonus Payment, to the Executive's beneficiary last designated by written instrument delivered by the Executive to the Employer prior to the date of death. The payments described in clauses (a) and (c) of the foregoing sentence shall be payable within 90 days of the date of death and the payment described in clause (b) shall be payable as provided in Section 3.3(A)(b). If no such designated beneficiary survives the Executive, such amount shall be paid to the Executive's surviving spouse, or if none, to the Executive's lawful descendants per stirpes then living, or if none survive the Executive, to the legal representative of the Executive's estate, or if none is appointed within 90 days of the date of death, to the Executive's heirs at law under the laws of the state in which the Executive is domiciled at the date of death. For Executives eligible under this Appendix C, the term "Severance Benefits" includes Death Benefits, subject to the conditions and limitations of the Plan.

C.3 Disability Termination Benefits. If the Executive is Disabled for a continuous period of six months, the Employer may terminate the Executive's employment upon 30 days prior written notice to the Executive, and the Employer shall provide the Executive the following " Disability Termination Benefits ": (a) the Executive's accrued but unpaid Base Salary through the date of termination, payable in accordance with the Employer's normal payroll practice, (b) the Pro-Rated Severance Payment, payable as provided in Section 3.3(A)(b), subject to Section 3.6, and (c) the Salary and Bonus Payment, payable within 30 days following the date of termination, subject to Section 3.6. For Executives eligible under this Appendix C, the term "Severance Benefits" includes Disability Termination Benefits, subject to the conditions and limitations of the Plan.

"Disabled" has the meaning set forth in the long-term disability policy or plan maintained by the Employer for its senior executives then in effect, provided that the definition of Disabled applied under such a policy or plan is consistent with the definition of disability or disabled under Code Section 409A and the regulations and guidance promulgated thereunder. In the absence of such a policy or plan, "Disabled" has the meaning ascribed to such term under Code Section 409A and the regulations and guidance promulgated thereunder.

C.4 Non-Qualified Plan Contribution. Notwithstanding anything in the Plan to the contrary, for each Executive set forth on this Appendix C, the Executive's Salary and Bonus Payment will be deemed compensation for purposes of any Retirement Benefit Plan, provided that the Salary and Bonus Payment will be deemed compensation for purposes of any tax-qualified Retirement Benefit Plan only to the extent permitted by the terms of such Retirement Benefit Plan and by applicable provisions of the Code.

C.5 Appendix C Benefits Subject to Plan. The Death Benefits, Disability Termination Benefits, and Non-Qualified Plan Benefits described in this Appendix C are subject to the conditions and limitations of the Plan in all respects.

C.6. Restrictive Covenants. Executives understand the global nature of the Employer's businesses and the effort the Employer undertakes to develop and protect their business and their competitive advantage. Accordingly, Executives recognize and agree that the scope and duration of the restrictions described in the Plan are reasonable and necessary to protect the legitimate business interests of the Employer. Notwithstanding anything in the Plan to the contrary, all Severance Benefits of Executives covered under this Appendix C are conditioned expressly on the Executive's compliance with each of the restrictive covenants of this Section C.6. During the period of an Executive's employment and for a period of two years following the Executive's termination of employment, the Executive shall not:

(a) singly, jointly, or in any other capacity, in a manner that contributes to any research, technology, development, account, trading, marketing, promotion, or sales and that relates to the Executive's employment with an Employer, directly or beneficially, manage, join, participate in the management, operation or control of, or work for (as an employee, consultant or independent contractor), or permit the use of his name by, or provide financial or other assistance to, any options exchange regulated by the SEC or alternative trading system that directly competes with an Employer, without the express written approval of the Chief Executive Officer and Chairman of the Board of the Corporation;

(b) provide any service or assistance that (i) is of the general type of service or assistance provided by the Executive to the Employer, (ii) relates to any technology, account, product, project or piece of work with which the Executive was involved during his or her employment, and (iii) contributes to causing an entity to come within the definition described in Section C.6(a) above;

(c) solicit or accept if offered to the Executive, with or without solicitation, on his or her own behalf or on behalf of any other person, the services of any person who is a then-current employee of the Employer (or was an employee of the Employer during the year preceding such solicitation), nor solicit any of the Employer's then-current employees (or an individual who was employed by or engaged by the Employer during the year preceding such solicitation) to terminate employment or an engagement with the Employer, nor agree to hire any then-current employee (or an individual who was an employee of the Employer during the year preceding such hire) of the Employer into employment with the Executive or any company, individual or other entity;

(d) directly or indirectly divert or attempt to divert from the Employer any business in which the Employer has been actively engaged during the Executive's employment, nor interfere with the relationships of the Employer or with their sources of business; or

(e) directly or indirectly, make any statements, written or verbal, or cause or encourage others to make any statements, written or verbal, that defame or disparage the business reputation, practices, or conduct of the Corporation, its employees, directors, or officers. The Executive acknowledges and agrees that this prohibition extends to statements, written or verbal, made to anyone, including but not limited to the news media, investors, potential investors, industry analysts, competitors, strategic partners, vendors, employees (past and present), and customers.

Nothing in this Section C.6 shall prohibit or restrict an Executive who is licensed to practice law from providing legal advice and counseling, or other advice and counseling incidental thereto, as an officer, employee, consultant, independent contractor or otherwise, to an options exchange regulated by the SEC or alternative trading system that directly competes with an Employer.

C.7 Confidentiality. The Executives recognize that the Employer may disclose secret or confidential information to the Executive during the period of the Executive's employment to enable the Executive to perform his or her duties. Subject to the following sentence, an Executive shall not during his or her employment (except in connection with the proper performance of his or her duties) and thereafter, without the prior written consent of the Employer, disclose to any person or entity any material or significant secret or confidential information concerning the business of the Employer that was obtained by the Executive in the course of the Executive's employment. This Section shall not be applicable if and to the extent the Executive 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 the Executive by any law, regulation or order of any court or regulatory commission, department or agency; provided, however, that the Executive shall provide the Employer with prompt notice thereof so that the Employer may seek an appropriate protective order and/or waive compliance with this Section with respect to such requirement. In the absence of a protective order or the receipt of waiver hereunder, if the Executive is nonetheless, in the opinion of the Executive’s counsel, compelled to furnish the Employer's confidential information to any third party or else stand liable for contempt or suffer other censure or penalty, such party may furnish such information without liability under this Section or otherwise. The Executive further agrees that if the Executive's employment is terminated for any reason, the Executive will not take, but will leave with the Employer, all records and papers and all matter of whatever nature that bears secret or confidential information of the Employer. For purposes of this Plan, 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 Employer'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 Employer, 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 the Executive.

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 Employer and the Executive shall request that the court exercise that power, and (c) the Plan shall be enforceable as so modified after the expiration of the time within which the judgment or decision may be appealed.

C.9 Remedies. If an Executive violates or threatens to violate any provisions of Sections C.6 or C.7 of the Plan, the Employer 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 the Executive from committing or continuing any violation of Sections C.6 or C.7. In the event that the Executive is found to have breached any provision set forth in Section C.6 or C.7 of the Plan, the time period provided for in that provision shall be deemed tolled ( i.e. , it will not begin to run) for so long as the Executive was in violation of that provision.

Appendix D

Special Provisions for the Termination of Certain Named Executives

Under the CBOE Holdings, Inc. Executive Severance Plan


1.	Notwithstanding any other provisions of the Plan to the contrary, the Employer may terminate the employment of Joanne Moffic-Silver of the Employer's Legal Division only after the Employer has consulted with its Regulatory Oversight Committee.

Any stock options, restricted stock or other stock-based awards granted to Edward L. Provost ("Provost") under the CBOE Holdings, Inc. Long-Term Incentive Plan, or any similar or successor plan, shall provide, among other things, that (a) all options, stock or other awards shall vest upon Provost's retirement after attaining age sixty-five (65) and (b) Provost may exercise all vested options thereafter for the remainder of their term. Restricted Stock that vests upon the achievement of Performance Goals will vest pro rata upon Provost's retirement after attaining age sixty-five (65).

Appendix E

RELEASE OF CLAIMS

THIS RELEASE OF CLAIMS ("Release") is made and entered into this _____ day of _____________, 20__, to be effective as of __________________ (the "Effective Date"), by and between CBOE HOLDINGS, INC, a Delaware corporation ("CBOE"), and ______________, a resident of the State of Illinois (the "Executive")

In consideration of CBOE's agreement to provide Executive with the severance pay and benefits, described in the CBOE Holdings, Inc. Executive Severance Plan (the "Plan"), to which Executive is not otherwise entitled and the sufficiency of which Executive acknowledges, Executive does hereby fully, finally and unconditionally release and forever discharge CBOE, its parent corporation, subsidiaries and affiliates, and each of their former and current officers, directors, employees, members, representatives and agents and all of their respective predecessors, successors, and assigns (collectively "Released Parties"), in their personal, corporate and representative capacities, from any and all rights, claims, liabilities, obligations, damages, costs, expenses, attorneys' fees, suits, actions, and demands, of any and every kind, nature and character, known or unknown, liquidated or unliquidated, absolute or contingent, in law and in equity, enforceable or arising under any local, state or federal common law, statute or ordinance relating to Executive’s past employment with CBOE or any past actions, statements, or omissions of CBOE or any of the Released Parties occurring prior to Executive’s execution of this Agreement, including but not limited to all claims for defamation, wrongful termination, back pay and benefits, pain and suffering, negligent or intentional infliction of emotional distress, breach of contract, and interference with contractual relations, tort claims, employment discrimination claims, and all claims arising under the Age Discrimination in Employment Act of 1967, as amended ("ADEA"), Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1866, as amended by the Civil Rights Act of 1991 (42 U.S.C. § 1981), the Family and Medical Leave Act, the Equal Pay Act, the Fair Labor Standards Act, the Americans with Disabilities Act, the Older Workers Benefit Protection Act, the Illinois Human Rights Act, the Illinois Minimum Wage Law, the Illinois Wage Payment and Collection Act, the Workers Adjustment and Retraining Act, and the Chicago and Cook County Human Rights Ordinances, and any other statutory, contract, implied contract, or common law claim arising out of or involving Executive’s employment, the termination of Executive’s employment, or any continuing effects of Executive’s employment with CBOE (the "Released Claims").

Executive agrees not to sue CBOE or any of the Released Parties with respect to rights and Released Claims covered by this Release. If any government agency or court assumes jurisdiction of any charge, complaint, or cause of action covered by this Release, Executive will not seek and will not accept any personal equitable or monetary relief in connection with such investigation, action, suit, or legal proceeding.

Executive has forty-five (45) days (until ____________) within which to consider this Release, although Executive may accept it at any time within those forty-five (45) days. Once Executive has signed this Release, Executive will still have seven (7) days in which to revoke his or her acceptance of the ADEA portion of the Release by notifying CBOE, and specifically, Deborah Woods, Human Resources Department. The ADEA portion of the Release will not be effective or enforceable until the seven (7) day revocation period has expired. If the ADEA portion of the Release is revoked, the remainder of this Release shall remain in full force and effect as to all of its terms except for the release of claims under the ADEA, and CBOE will have three (3) business days to rescind the entire Release by so notifying Executive.


4.	Executive agrees that he or she will continue to be governed by those obligations arising under Section 7.2 of the Plan, and Sections C.6 and C.7 of the Plan if applicable, which are incorporated by reference herein, and such provisions shall not be released, shall be unaffected hereby, and shall remain in full force and effect.


5.	This Release shall be binding upon and inure to the benefit of CBOE and its successors and assigns and Executive and his heirs, executors and administrators.


6.	This Release shall be construed and interpreted under the laws of the State of Illinois to the extent not preempted by applicable laws of the United States.

By signing this Release, Executive acknowledges and understands that this Release does not imply that CBOE has done anything unlawful or wrong.

CBOE HOLDINGS, INC.

________________________________

By: ________________________ EXECUTIVE

Its: _________________________

Appendix A Executives

CBOE HOLDINGS, INC. EXECUTIVE SEVERANCE PLAN

ACKNOWLEDGMENT AND ACCEPTANCE OF

THE TERMS AND CONDITIONS OF THE PLAN

CBOE Holdings, Inc. (the " Corporation ") has established the CBOE Holdings, Inc. Executive Severance Plan (the " Plan "). The Plan provides severance payments and benefits to certain eligible executives in the event of employment termination by the Corporation without "cause" or termination by the executive for "good reason" (each as defined in the Plan). You are eligible to participate in the Plan.

By the signatures below of the representative of the Corporation and the Executive named herein, the Corporation and the Executive agree that the Corporation hereby designates the Executive as eligible to participate in the Plan, and the Executive hereby acknowledges and accepts such participation, subject to the terms and conditions of the Plan, and agrees to the terms of the Plan, which is attached hereto and made a part hereof.

Name of Executive: «FirstName» «LastName»

Date of Eligibility and Participation: «Date_2»

At Will Employment . Nothing in this Acknowledgement and Acceptance or in the Plan confers upon the Executive any right to continue in employment for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation or of the Executive, which rights are hereby expressly reserved by each, to terminate the Executive's employment at any time for any reason.

Amendment and Termination of Plan . The Corporation reserves the right, on a case-by-case basis or on a general basis, to amend the Plan in accordance with Section 8.1. No amendment or termination of the Plan that has the effect of removing an Executive from Appendix A may be, without the express written consent of such Executive, (a) effective until a date that is two years after the later of adoption of such amendment or termination or written notice of such amendment or termination to the affected Executive(s); or (b) retroactive. No amendment or termination shall eliminate or reduce any benefit with respect to any Executive who experiences a termination of employment that occurs on or before such amendment or termination becomes effective.



EXECUTIVE:	CBOE HOLDINGS, INC.
	By: ________________________________
Signature	Title: _______________________________

Attachment :

CBOE Holdings, Inc. Executive Severance Plan

Appendix C Executives

CBOE HOLDINGS, INC. EXECUTIVE SEVERANCE PLAN

ACKNOWLEDGMENT AND ACCEPTANCE OF

THE TERMS AND CONDITIONS OF THE PLAN

CBOE Holdings, Inc. (the " Corporation ") has established the CBOE Holdings, Inc. Executive Severance Plan (the " Plan "). The Plan provides severance payments and benefits to certain eligible executives in the event of employment termination by the Corporation without "cause," termination by the executive for "good reason," termination due to death, and termination due to "disability" (each as defined in the Plan). You are eligible to participate in the Plan.

Name of Executive: «FirstName» «LastName»

Date of Eligibility and Participation: «Date_2»



EXECUTIVE:	CBOE HOLDINGS, INC.
	By: ________________________________
Signature	Title: _______________________________

Attachment :

CBOE Holdings, Inc. Executive Severance Plan

Exhibit 10.13

[CBOE LETTERHEAD]

September 25, 2016

Dear Mr. Hemsley:

A. OUR PROPOSAL TO YOU

1. Upon the closing of the proposed transaction, you will be appointed EVP, President Europe and have responsibility for European operations. Your principal office location will be London. You will be a member of the Senior Management Team.

2. Your initial annual base salary will be 483,890 GBP, your initial targeted annual bonus will be 459,696 GBP and your initial targeted equity incentive compensation will have a grant date value of $596,000 USD.

3. In consideration of your agreements described below, after the closing of the transaction, CBOE will grant you an award of time-vested restricted stock units having a grant date value of $596,000 USD (the “Award”). The Award will vest in full on the third anniversary of the closing of the transaction, provided that you remain in continuous employment with the combined company through that date and subject to the terms and conditions contained in the Long-Term Incentive Plan (the “Plan”). A copy of the Plan is attached as Exhibit A to this letter.

Mark Hemsley

Continued Employment Offer

Page 2

5. As a senior executive of the company, you will be entitled to participation in our executive level U.K. benefit plans that are enjoyed by similarly situated personnel. A description of those benefits as currently in effect is attached as Exhibit B to this letter.

6. The company does not generally provide employment agreements to its executives and it is not contemplated that there would be such an agreement with you. Nevertheless, subject to your agreement to the terms of B.1, below, you will continue to be eligible for the severance and other change in control benefits under your Employment Agreement with Bats dated December 17, 2015 (the “Employment Agreement”), including the accelerated vesting of your Bats equity awards assumed in the merger (but not any CBOE awards granted after closing). Upon the expiration of your right to change in control benefits under the Employment Agreement (24 months after the closing of the proposed transaction), you would become eligible for coverage under our executive level severance policy in lieu of any right to severance or other termination-related benefits under the Employment Agreement. A copy of the current policy is attached as Exhibit C to this letter.

B. YOUR COMMITMENTS TO CBOE AND TO THE COMBINED COMPANY

Mark Hemsley

Continued Employment Offer

Page 3

*****************************

Very truly yours,

CBOE Holdings, Inc.

By /s/ Edward T. Tilly

Edward T. Tilly

AGREED AND ACCEPTED AS OF THE DATE FIRST ABOVE WRITTEN

/s/ Mark Hemsley

Mark Hemsley

Exhibit A

SECOND AMENDED AND RESTATED

CBOE HOLDINGS, INC. LONG-TERM INCENTIVE PLAN

(Amended and Restated Effective February 17, 2016)

ARTICLE 1

DEFINITIONS

Whenever used in the Plan, the following terms have the meanings set forth below, and when the meaning is intended, the initial letter of the word is capitalized:

“Award” means a Non-Qualified Stock Option, Restricted Stock, Restricted Stock Unit, or Incentive Compensation award granted under the Plan.

“Board” means the Board of Directors of the Corporation.

Affiliate will be conclusively presumed to be done, or omitted to be done, in good faith and in the best interests of the Corporation or an Affiliate.

“Change in Control” means the first to occur of the following:

(a)

(b)

(c)


(d)	Approval by the stockholders of the Corporation of a complete liquidation or dissolution of the Corporation.

“Code” means the Internal Revenue Code of 1986, as amended. A reference to any provision of the Code will include reference to any successor provision of the Code.

“Corporation” means CBOE Holdings, Inc. or any successor corporation thereto.

“Director” means any individual who is a member of the Board on or after the Effective Date.

“Disabled” means the Participant:


(a)	becomes unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months; or


(b)	by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receives income replacement benefits for a period of not less than three months under an accident and health plan of the Corporation or an Affiliate, as applicable.

“Effective Date” has the meaning set forth in Section 10.3 of the Plan.

“Eligible Individual” means any Employee or non-employee Director.

“Exchange Act” means the Securities Exchange Act of 1934, as amended. A reference to any provision of the Exchange Act will include reference to any successor provision of the Exchange Act.

“Exercise Price” means the purchase price at which an Option may be exercised, subject to the provisions of Article 5.

“Fair Market Value” means, as of any date:

(a)

(b)

“Insider” means an Officer, Director, or other person whose transactions in Stock are subject to Section 16 of the Exchange Act.

“Officer” means any person designated by the Board as an officer of the Corporation.

“Participant” means an Eligible Individual to whom the Committee has made one or more Awards under the Plan in accordance with Section 4.1 of the Plan.

“Performance Period” means a period of one or more years, as determined by the Committee.

“Person” means a “person” as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act.

“Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended, and any guidance issued thereunder by the SEC.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002. A reference to any provision of the Sarbanes-Oxley Act will include reference to any successor provision of the Sarbanes-Oxley Act.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended. A reference to any provision of the Securities Act will include reference to any successor provision of the Securities Act.

“Stock” means the “Common Stock” of the Corporation (as defined in Article Fourth (a)(i) of the Second Amended and Restated Certificate of Incorporation of the Corporation).

ARTICLE 2

PLAN ADMINISTRATION


(a)	Prescribe, amend, and rescind rules and regulations relating to the Plan and any Awards;


(b)	Select Eligible Individuals (including members of the Committee) to receive Awards, as provided in Section 4.1 of the Plan;


(c)	Determine the form and terms of Awards;


(d)	Determine the number of shares of Stock or other consideration subject to Awards, as provided in Articles 5 through 9 of the Plan;


(e)	Determine whether Awards will be granted singly, in combination or in tandem with, in replacement of, or as alternatives to, other Awards under the Plan or grants or awards under any other incentive or compensation plan of the Corporation;


(f)	Construe and interpret the Plan, any Award Agreement in connection with an Award and any other agreement or document executed pursuant to the Plan;


(g)	Correct any defect or omission, or reconcile any inconsistency in the Plan, any Award or any Award Agreement;


(h)	Accelerate or, with the consent of the Participant, defer the vesting of any Award or the exercise date of any Award, subject to the limitations of Section 409A;

(i)

(j)

(k)


(l)	Determine whether a Participant has engaged in the operation or management of a business that is in competition with the Corporation or any of its Affiliates, or whether a Participant has violated the restrictive covenants referred to in Section 10.12; and


(m)	Make all other determinations deemed necessary or advisable for the administration of the Plan.

ARTICLE 3

AUTHORIZED SHARES

ARTICLE 4

ELIGIBILITY AND AWARDS

ARTICLE 5

STOCK OPTIONS

Section 5.3 Payment of Exercise Price. The Exercise Price will be payable in full in any one or more of the following ways:


(a)	in cash, check, bank draft, money order or wire transfer payable to the Corporation;


(b)	by delivery to the Corporation (either by actual delivery or by attestation) of shares of Stock (which are owned by the Participant free and clear of all liens and other encumbrances and which are not subject to the restrictions set forth in Article 6) having an aggregate Fair Market Value on the date of exercise of the Option equal to the Exercise Price for the shares being purchased;


(c)	by requesting that the Corporation withhold such number of shares of Stock then issuable upon exercise of the Option as will have an aggregate Fair Market Value equal to the Exercise Price for the shares being acquired upon exercise of the Option (and any applicable withholding taxes);

(d)


(e)	provided that a public market for the Corporation’s Stock exists, and to the extent permitted by the Sarbanes-Oxley Act:

(i)

(ii)


(f)	by any combination of the foregoing.

the Exercise Price has been made, the Participant will be considered for all purposes to be the owner of the shares with respect to which payment has been made.

ARTICLE 6

RESTRICTED STOCK

ARTICLE 7

RESTRICTED STOCK UNIT AWARDS

ARTICLE 8

CHANGE IN CONTROL

(a)

(b)

(c)

Section 8.2 Replacement Awards .


(a)	An Award shall meet the conditions of this Section 8.2 (and hence qualify as a Replacement Award) if: (i) it is of the same type as the Replaced Award (provided, however, that the Replacement Award may be of a different

(b)

ARTICLE 9

CERTIFICATES FOR AWARDS OF STOCK

ARTICLE 10

MISCELLANEOUS

Section 10.6 Benefits . Amounts received under the Plan are not to be taken into account for purposes of computing benefits under other plans.

Section 10.7 Successors and Assigns. The terms of the Plan will be binding upon the Corporation and its successors and assigns.

Section 10.8 Headings. Captions preceding the sections hereof are inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provision hereof.

Section 10.12 Forfeiture Events.

(a)

(b)


(i)	any and all Awards granted to him or her under the Plan, including Awards that have become vested and exercisable; and/or


(ii)	the profit the Participant has realized on the exercise of any Options, which is the difference between the Exercise Price and the Fair Market Value of the Option that the Participant exercises after terminating Service and within the six-month period immediately preceding the Participant’s termination of Service (the Participant may be required to repay such difference to the Corporation).


(a)	Determine which Affiliates shall be covered by the Plan;


(b)	Determine which Employees and Directors outside the U.S. are eligible to participate in the Plan;


(c)	Modify the terms and conditions of any Award granted to Employees or Directors outside the U.S. to comply with applicable non-U.S. laws and/or to facilitate the operation and administration of Awards and the Plan;


(d)	Establish sub-plans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable; and


(e)	Take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals.

ARTICLE 11

INCENTIVE COMPENSATION AWARDS

twenty-five percent (25%) of the Performance Period has elapsed and, in any event, at a time when the outcome of the Performance Goals remain substantially uncertain.


(a)	Options. The maximum aggregate number of shares of Stock subject to Options granted to any one Participant in any one calendar year shall be 1,000,000 shares, determined as of the date of grant.


(b)	Restricted Stock and Restricted Stock Units. The maximum aggregate number of shares of Stock subject to Restricted Stock and Restricted Stock Units granted to any one Participant in any one calendar year shall be 500,000 shares, determined as of the date of grant.

(c)

(d)

--------------------------

Exhibit B

Benefits At a Glance

MEDICAL INSURANCE


•	Full-time employees and their dependents are eligible the day after completion of one month of continuous employment.


•	Eligible dependents include your spouse and or your Domestic Partner/Civil Union Partner and dependent child(ren) under the age 26 as well as unmarried military veteran dependents who are Illinois residents and under the age of 30.



	Blue Cross Blue Shield PPO B		Blue Cross Blue Shield PPO/HSA
Benefit	In-Network	Out-of-Network	In-Network	Out-of-Network
Deductible:
Individual	$750	$1,500	$1,500	$3,000
Family	$2,000	$4,000	$3,000*	$6,000*
Out-of-Pocket Limit:
Individual	$2,500	$5,000	$3,000	$6,000
Family	$5,000	$10,000	$6,000	$12,000
Lifetime Maximum			Unlimited
Coinsurance	80%	60%	80%	60%
Physician Office Visit
Primary Care Physician	80%	60%	80%	60%
Specialist	80%	60%	80%	60%
Preventive Care	100%	100%	100%	100%
Hospital Services
Deductible per admission	$200	$200	80% / after deductible	60% / after deductible
Inpatient	80%	60%	80%	60%
Outpatient	80%	60%	80%	60%
Emergency Care	100% /no deductible		100% /after deductible
Mental Health/ Substance Abuse
Deductible per admission	$200 (applies towards the deductible)		80% / after deductible	60% / after deductible
Inpatient	80%	60%	80%	60%
Outpatient	80%	60%	80%	60%
Other Covered Services	80%		80% /after deductible

As of 07/01/2016 1

PRESCRIPTION DRUG PLAN

The chart below provides employee co-payments for prescriptions. Prescription coverage is administered by Express Scripts.



PPO Plan B:	Generic	Single Source Brand	Multi Source Brand
Retail 30	$10.00	10% Co-insurance $25.00 Minimum $50.00 Maximum	10% Co-insurance $40.00 Minimum $80.00 Maximum
Advantage 90	$20.00	10% Co-insurance $50.00 Minimum $100.00 Maximum	10% Co-insurance $80.00 Minimum $160.00 Maximum
Mail Order	$20.00	10% Co-insurance $50.00 Minimum $100.00 Maximum	10% Co-insurance $80.00 Minimum $160.00 Maximum
PPO/HSA Plan	Prior to meeting the PPO/HSA deductible ($1,500 single & $3,000 family), you will be responsible for paying the total cost of the prescription - of which is reimbursable from the HSA. After meeting the deductible, the plan will then pay 80% of the cost. Once the Out-of-Pocket limit ($3,000 for individual & $6,000 for family) has been satisfied, the plan will pay 100% of the cost.

EASY TO USE HEALTH CARE RESOURCES & TOOLS


•	Ask your physician questions about treatments and tests


•	Use the Blue Star Hospital Report to learn information about hospital quality and safety


•	Use the 24/7 Nurse line to assist with questions regarding health problems or concerns. It is staffed by registered nurses who are available 24 hours a day, 7 days a week. Call (800) 299-0274.


•	Use the Cost Estimator to obtain estimated costs of various medical procedures


•	Use the My Health section of Blue Access for Members to make more informed health care decisions by reading about health and wellness topics and research specific conditions


•	To determine if a drug requires prior authorization


•	To check drug interaction using real time information


•	Send alerts so you never miss a dose or refill

Keep in mind that you can also save money by using mail order.

DENTAL INSURANCE

Eligibility


•	Full-time employees are eligible the day after completion of one month of continuous employment.


•	Eligible dependents include your spouse and or your Domestic Partner/Civil Union Partner and dependent child (ren) not married under the age 26 as well as unmarried military veteran dependents who are Illinois residents and under the age of 30.

As of 07/01/2016 2

DENTAL INSURANCE (cont’d.)


•	If dental coverage is waived, the waiver will stay in effect for 2 years. You will not be eligible to enroll until the next Open Enrollment period following the 2 year period unless you have a qualifying event.



Coverage Type	Coverage Description	In-Network	Out-of-Network		Annual Deductible
A	Preventative	100%	100%		N/A
B	Basic Restorative	100%	80%		$50 Individual/$100 Family
C	Major Restorative	50%	50%		$50 Individual/$100 Family
D	Orthodontia	50%*	50%*		N/A
Maximum Annual Benefit		$1,250**		$1,000**

* Orthodontia has a lifetime maximum benefit of $1,000 for dependents age 19 and under.

** One annual deductible for total services - Basic and/or Major.

2016 Medical & Dental Insurance Employee Contribution Schedule Per Pay Period

Contributions change in January of each calendar year



Coverage Level	PPO Plan B	PPO/HSA	Dental Plan
Employee	$80.53	$60.41	$9.38
Employee + Spouse	$165.08	$129.75	$18.75
Employee + Child(ren)	$148.97	$117.09	$19.25
Family	$289.89	$227.85	$33.75

HEALTH SAVINGS ACCOUNT (HSA)

When enrolling in the PPO/HSA plan, you have an option to contribute to a Health Savings Account which allows:


•	tax free contributions,


•	tax free earnings,


•	tax free withdrawals when used for qualified medical expenses, and


•	the ability to rollover contributions from year to year.

To take advantage of an HSA:


•	you must be enrolled in the high deductible plan (PPO/HSA),


•	you cannot be covered under other health insurance,


•	you cannot be enrolled in Medicare or Medicaid,


•	you cannot be claimed as a dependent on another individual’s tax return and


•	you do not have a spouse with a health FSA or Health Reimbursement Account that could reimburse your medical expenses.

FLEXIBLE SPENDING ACCOUNTS


•	Full-time employees hired in the current year are eligible after completion of one month of continuous employment.


•	Annual open enrollment is held each fall for coverage effective January 1st. Current participants must re-enroll each year.

Medical Spending Account

As of 07/01/2016 3

FLEXIBLE SPENDING ACCOUNTS (cont’d.)

Dependent Care Spending Account:

Up to $5,000 can be set aside on a pre-tax basis to pay your dependent care expenses such as day care and nursery school for children or other eligible dependents.

Limited Purpose FSA - PPO/HSA

The following compares a Health Savings Account to a Flexible Spending Account. If you enroll in the PPO/HSA, it is possible to enroll in both.



	CBOE Health Savings Account	CBOE Flexible Spending Account
Tax free contributions	Yes	Yes
Limits	Individual: $3,350 Family: $6,750	Individual: $2,550 Family: $2,550
Annual Catch up Contribution age 55+	$1,000	No
Earnings on Contributions	Yes	No
Carry over contributions year to year	Yes	No
Portable	Yes	No
Cash outs if no medical expenses	Yes but if before age 65 subject to a 20% penalty	No
Account can be used for out-of-pocket and unreimbursed medical expenses	Yes- HSA Qualified Expenses	Yes - FSA Allowable Expenses

HEALTH CLUB DISCOUNTS

To encourage your healthy lifestyle, CBOE has negotiated discounted rates for individual memberships with several health clubs. Each offers a variety of services and locations.



Health Club	Negotiated Monthly Cost	Your Monthly Cost Less $35 Reimbursement
BCBS Fitness Program	$25	$0
XSport Fitness	$35	$0
Bottom Line Yoga	$69	$34
Lifetime Fitness	$63 - $110*	$28 - $75
Buckingham Athletic Club	$100**	$65
Chicago Athletic Club	$65***	$30

All rates are subject to change.

* Range is based on club location.

** Rate contingent on a certain number of employees enrolling

***$65/month with 12-month commitment; cost is $75 with no annual commitment

As of 07/01/2016 4

HEALTH CLUB DISCOUNTS (cont’d.)


•	Full-time employee with at least one month of continuous service.


•	Completion of a Health Assessment (HA) each calendar year. To complete the HA go to Blue Access for Members click “Health Assessment”. You can provide proof of completion of your HA by stopping by Human Resources and logging on to Blue Access for Members (BAM) or by sending a screen shot of “My Assessments” in BAM to CBOEHR@cboe.com.


•	Submit your monthly invoice unless you are a member of Buckingham Athletic Club or Lifetime Fitness.


•	Reimbursements occur on a semi-annual basis at the end of June and December.


•	Be an active employee at the time the reimbursement occurs. Please note the reimbursement is considered a taxable benefit.

EMPLOYEE ASSISTANCE PROGRAM

All employees and their eligible dependents are eligible immediately upon hire. The employee assistance program is administered by Metropolitan Family Services.

Benefits


•	Three counseling sessions per year paid by the Exchange


•	The employee is responsible for cost of any additional counseling (Note: Additional mental health services and substance abuse rehabilitation services may be available under the terms of your individual health care plan.)


•	A wide range of confidential counseling services are available, including but not limited to marriage, family, emotional, financial and legal problems, and drug dependence.


•	Child & elder care

You can contact EAP by calling (800)-905-0994 or by logging on to the website at mfs.advantageengagement.com and entering CBOE as your company code.

LIFE AND AD&D

Eligibility


•	Full-time employees are eligible after completion of one month of continuous employment.

Group Term Life


•	Equal to 3 times annual salary rounded to the nearest $500


•	Maximum benefit is $300,000. If you are age 65 but under age 70, your benefit will be reduced to 65%. If you are age 70 or older, your maximum benefit is reduced to 50% of the maximum coverage amount.


•	CBOE pays the entire premium, however coverage over $50,000 is taxable.

Dependent Life


•	$2,500 benefit for spouse


•	$1,000 benefit for each unmarried dependent child from birth through 21 years old or through 23 years old if full-time student.

Accidental Death & Dismemberment


•	Employee coverage only


•	Equal to and in addition to the life insurance benefit. Payable if death is the result of an accident.


•	Portions of this benefit are payable for accidental loss of eyesight, hands, feet.

SHORT-TERM DISABILITY

As of 07/01/2016 5

Eligibility


•	Full-time employees are eligible after 12 months of employment

Benefits


•	100% salary continuance for a maximum of 26 weeks


•	Commences after the fifth work day of consecutive disability

LONG-TERM DISABILITY

Eligibility


•	Full-time employees are eligible after one year of employment.


•	Employees earning $50,000 per year or more are eligible immediately.

Benefits


•	After 180 days of consecutive disability (26 weeks)


•	66 2/3 of basic monthly earnings with a maximum monthly benefit of $20,000


•	For disabilities that begin before age 60, maximum benefits are to age 65. Age 60 and after, maximum benefits depend on age at start of disability

Cost


•	Contributions are not required by employees earning less than $50,000 per year.


•	The annual premium for those employees earning more than $50,000 is .527 per $100 in salary which is deducted on a per pay period basis.

The following table illustrates how to calculate your deduction:



Annual Salary	LTD Covered Salary	Pay Period Deduction
$100,000	Annual Salary divided by 12 $8,333.34	(Covered Salary/100*.527)/divided by 2 $21.96

SMART PLAN RETIREMENT PLAN

Eligibility

Employee Contributions


•	Pre-Tax Contributions - from 1 - 50%


•	After-Tax Contributions - from 1 - 10%


•	The total combined maximum is 50%

Company Contributions

As of 07/01/2016 6

SMART PLAN RETIREMENT PLAN (cont’d.)

Vesting

The vesting schedule is calculated on years of service as shown in the following chart:



1 year	20%
2 years	40%
3 years	60%
4 years	80%
5 years or more years	100%

You are always 100% vested in your own contributions and their earnings.

Investment Elections

Fidelity is the recordkeeper for the Smart Plan. Investment fund choices include:


•	Fidelity Retirement Money Market Portfolio


•	Managed Income Portfolio II Class I


•	American Century Inflation Adjusted Bond Fund Class Institutional


•	Fidelity Investment Grade Bond Fund


•	Fidelity Capital & Income Fund


•	Invesco Van Kampen Growth and Income Fund R6


•	Spartan 500 Index - Institutional Class


•	Fidelity Low-Priced Stock Fund: Class K


•	Goldman Sachs Small Cap Value Class R6


•	Fidelity Contrafund: Class K


•	Fidelity OTC Portfolio: Class K


•	Harbor Capital Appreciation Fund Institutional Class


•	Baron Asset Fund Institutional Class


•	Lord Abbett Developing Growth Fund Class R6


•	Columbia Acorn International Fund Class Y


•	Templeton Foreign Fund R6


•	Wells Fargo Advantage Emerging Market Equity Fund R6


•	Fidelity Freedom Income Fund: Class K


•	Fidelity Freedom Funds: Class K (12 funds)


•	Fidelity Asset Manager 50%


•	Brokerage Link Account - This account offers investment alternatives in securities other than listed above and is available to qualified participants.

EDUCATIONAL ASSISTANCE

Eligibility


•	Full-time employees are eligible for tuition reimbursement after completion of 6 months of employment.

Highlights


•	Institution must be accredited by the North Central or the Independent Association of Colleges and Secondary Schools


•	75% reimbursement of tuition for grades of A, B, C or Pass


•	Lab, late registration and book fees are not reimbursable


•	Undergraduate degrees must be job or business related


•	Graduate degrees and certification programs must be job related


•	Required undergraduate courses that are not job related are only reimbursable after a two year waiting period

Maximum $10,000 per year

As of 07/01/2016 7

PAID TIME OFF

Vacation Days



Less than 3 years	10 days
3 - 8 years	15 days
9 - 13 years	20 days
14 or more years	25 days

Personal Leave Days (PL Days)

TRANSPORTATION PROGRAM

Eligibility


•	Full-time employees are eligible to participate upon hire.

Highlights:


•	Eligible costs for the program are expenses you incur traveling to and from work while using mass transportation (i.e. Metra, CTA, Pace, etc.)


•	Only employee expenses can be set aside on a pre-tax basis, not the transportation expenses of family members.


•	You may enroll, cancel participation or change the amount of a deduction by the 6th of each month.

Transit Pass or Ventra


•	You may contribute any amount between ten dollars ($10) and once hundred and twenty-seven dollars and fifty cents ($127.50), on a pre-tax/semi-monthly basis.


•	You may also contribute on a post-tax basis.

Ventra Card


•	Ventra is the CTA’s and Pace’s fare payment system that will make it faster and easier to access transit throughout the region. A one-time Ventra Card purchase fee of $5 is immediately refunded as a transit value upon registration.


•	You may purchase a 30- day for $100. The 30-day is valid for 30 consecutive days from the date and time of the first use.


•	You may purchase Ventra to be used on a pay-per-use basis of increments in $10, $20, $30, $35, $45, $50, $60, $70, $80, $100, $120, $140 and $150.


•	The contribution is deducted on a semi-monthly basis.


•	Only whole monthly contribution amounts can be posted to the account.