Contract Adjustments

CBOE Research Circular #RS97-146

May 8, 1997

First American Corporation ("FATN/EQJ") 2-for-1 Stock Split Ex-Distribution Date: May 12, 1997

First American Corporation ("FATN/EQJ") has announced a 2-for-1 common stock split, with a payable date of May 9, 1997, to shareholders of record April 28, 1997. The ex-date for the stock split is Monday, May 12, 1997.

Contract Adjustment

Pursuant to OCC rules (Article VI, Section 11), all outstanding EQJ option series will be adjusted to reflect this 2-for-1 stock split on Monday, May 12, 1997, at 8:30 A.M. Chicago time. The OCC will issue one additional contract for each open contract on the ex-date. Also on the ex-date, each EQJ series will have an adjusted exercise price equal to one-half of the exercise price rounded to the nearest 1/8 of a point for each EQJ series existing on the business day immediately prior to the ex-date. The option symbol will remain EQJ. Adjusted exercise prices are shown below.

The option adjustment will appear in the Daily Position Report of the clearing member firms on the ex-date. After 8:30 A.M. Monday, May 12, 1997, all trades, corrections and exercises must be submitted to the CBOE and OCC on an adjusted basis.

Adjusted Exercise Prices

On Monday, May 12, 1997, the ex-distribution date, trading in EQJ series will be on an adjusted basis. At 8:30 A.M., Chicago time, an opening rotation will be effected with the following adjustments:

EXISTING SERIES                              ADJUSTED SERIES*

EQJEK May 55 Calls                           EQJEY May 27-1/2
EQJEL May 60 Calls                           EQJEF May 30
EQJEM May 65 Calls                           EQJEZ May 32-1/2
EQJEN May 70 Calls                           EQJEG May 35

EQJFJ Jun 50 Calls                           EQJFE Jun 25
EQJFK Jun 55 Calls                           EQJFY Jun 27-1/2
EQJFL Jun 60 Calls                           EQJFF Jun 30
EQJFM Jun 65 Calls                           EQJFZ Jun 32-1/2
EQJFN Jun 70 Calls                           EQJFG Jun 35
EQJFO Jun 75 Calls                           EQJFU Jun 37-1/2

EQJIJ Sep 50 Calls                           EQJIE Sep 25
EQJIK Sep 55 Calls                           EQJIY Sep 27-1/2
EQJIL Sep 60 Calls                           EQJIF Sep 30
EQJIM Sep 65 Calls                           EQJIZ Sep 32-1/2
EQJIN Sep 70 Calls                           EQJIG Sep 35
EQJIO Sep 75 Calls                           EQJIU Sep 37-1/2

EQJLL Dec 60 Calls                           EQJLF Dec 30
EQJLM Dec 65 Calls                           EQJLZ Dec 32-1/2
EQJLN Dec 70 Calls                           EQJLG Dec 35
EQJLO Dec 75 Calls                           EQJLU Dec 37-1/2

EQJQK May 55 Puts                            EQJQY May 27-1/2
EQJQL May 60 Puts                            EQJQF May 30
EQJQM May 65 Puts                            EQJQZ May 32-1/2
EQJQN May 70 Puts                            EQJQG May 35

EQJRJ Jun 50 Puts                            EQJRE Jun 25
EQJRK Jun 55 Puts                            EQJRY Jun 27-1/2
EQJRL Jun 60 Puts                            EQJRF Jun 30
EQJRM Jun 65 Puts                            EQJRZ Jun 32-1/2
EQJRN Jun 70 Puts                            EQJRG Jun 35
EQJRO Jun 75 Puts                            EQJRU Jun 37-1/2

EQJUJ Sep 50 Puts                            EQJUE Sep 25
EQJUK Sep 55 Puts                            EQJUY Sep 27-1/2
EQJUL Sep 60 Puts                            EQJUF Sep 30
EQJUM Sep 65 Puts                            EQJUZ Sep 32-1/2
EQJUN Sep 70 Puts                            EQJUG Sep 35
EQJUO Sep 75 Puts                            EQJUU Sep 37-1/2

EQJXL Dec 60 Puts                            EQJXF Dec 30
EQJXM Dec 65 Puts                            EQJXZ Dec 32-1/2
EQJXN Dec 70 Puts                            EQJXG Dec 35
EQJXO Dec 75 Puts                            EQJXU Dec 37-1/2
Any additional EQJ series that are added prior to the ex-date will also be adjusted in the manner described above.

* Some series have non-standard strikes and price symbols with respect to the OPRA exercise price symbol format. Note that Y (27-1/2), Z (32-1/2), and U (37-1/2) are non-standard striking symbols (prices).

GTC Order Conversion

On Friday, May 9, 1997, immediately after the CBOE close, the system will convert or cancel all resting orders in the EQJ order book. If your firm has requested, all EBook orders (phone, wire, and electronic) and all ORS orders residing outside the book (booth or crowd routed) will be converted reflecting the adjustments. If your firm has requested, all EBook orders and ORS orders residing outside of the book will be canceled. If your firm receives EBook CXL drops, the CXL confirms will print at your booth at 3:15 p.m. ORS CXLs will also be transmitted electronically to your branches.

Immediately after the close, the book staff will return a final written report listing the orders that are converted or canceled to all firms. If converted, this list will also show how the new orders will be adjusted. This report will be available on request anytime during the day prior to the night of the adjustment.

Position and Exercise Limits

The position and exercise limits following this stock split will be 9,000 contracts on the same side of the market through December 20, 1997. After the December 1997 expiration, the position and exercise limits will revert to the standard limit of 4,500 contracts.

Questions regarding this memo can be addressed to the CBOE Investor Services Department at 1-800-OPTIONS (1-800-678 4667), press 4, press 2.

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