COMEX Division Members as of November 17, 2006 have or will receive 8,400 shares of NYMEX Holdings, Inc. common stock per seat on either (a) November 20, 2006 (the "Closing Date"); (b) January 2, 2007; or (c) three equal installments May 15, 2007; November 11, 2007; and May 9, 2008. The type of transaction that has transpired with regard to the exchange of your COMEX Electronic Trading Rights for NYMEX common stock does not meet the reporting requirements under the Internal Revenue Service's Codes and Regulations. As such, you will not be receiving a Form 1099 for the shares that you have received, or will receive in the future, in exchange of your COMEX Electronic Trading Rights.
We have prepared fair value amounts per seat for those COMEX Members who have elected to receive shares on November 20, 2006 (the "Closing Date") and January 2, 2007. Please review the attached excerpt entitled "Certain Federal Income Tax Consequences" from the proxy statement dated November 9, 2006 that was mailed to each of you prior to the November 20, 2006 Special Meeting of COMEX Members. This section of the proxy statement provides detail on the tax effects of this transaction. Each COMEX Member who received or will receive NYMEX common stock should consult his/her tax advisor to determine the proper amount of his/her taxable income pursuant to the transaction.
- COMEX Members Who Elected to Take Delivery of NYMEX Shares of Common Stock on November 20, 2006 – (the "Closing Date")
We have calculated a value for the 8,400 shares you received per COMEX seat at $1,120,434 per seat based upon the average of the opening ($136.50) and closing ($130.27) price of NYMEX stock on the closing date of the transaction (November 20, 2006) multiplied by the 8,400 shares per seat which you received. Please note that this value may be subject to a discount because the stock is subject to restrictions. You should consult a tax advisor to determine the correct discount that applies, if any, to your situation.
- COMEX Members Who Elected to Take Delivery of NYMEX Shares of Common Stock on January 2, 2007
We have calculated a value for the 8,400 shares you received per COMEX seat at $1,039,332 based upon the average of the opening ($122.40) and closing ($124.01) price of NYMEX stock on December 29, 2006 and the opening ($124.50) and closing ($124.01) price of NYMEX stock on January 3, 2007 (January 1, 2007 was a holiday and on January 2, 2007 the stock market was closed in observance of former President Ford's funeral) multiplied by the 8,400 shares which you received per seat. Please note that this value may be subject to a discount because the stock is subject to restrictions. You should consult a tax advisor to determine the correct discount that applies, if any, to your situation.
- COMEX Members Who Elected to Take Delivery of NYMEX Shares of Common Stock in Three (3) Equal Installments During 2007 and 2008
You will need to do a calculation similar to the two previous calculations whereby you obtain an average of the opening and closing price of NYMEX stock on the dates you receive your stock (May 15, 2007; November 11, 2007; and May 9, 2008 respectively) and multiply it by the number of shares you receive at that particular time (i.e., 2,800 shares per COMEX seat on each of the delivery dates of May 15, 2007; November 11, 2007; and May 9, 2008).
Inquiries regarding the aforementioned may be directed to Tony Filoso, Vice President & Controller, at (212) 299-2517.
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To ensure compliance with Treasury Department regulations, we advise you that, unless otherwise expressly indicated, any federal tax advice contained in this letter was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein. |
