Notice No. 00-363
October 24, 2000

TO: All NYMEX Division Members
 All NYMEX Division Member Firms
 All NYMEX Division Clearing Firms

FROM: Neal Wolkoff, Executive Vice President

RE: IRS Gives Exchange Favorable Private Letter Ruling on Demutualization 
Transaction

The Internal Revenue Service yesterday gave the Exchange a favorable private 
letter ruling notifying the Exchange that there would be no tax consequences 
to it or any of its members as a result of its demutualization.

This ruling was the final approval required for the demutualization of the 
Exchange to take effect.  The plan was previously approved by the Securities 
and Exchange Commission, the Commodity Futures Trading Commission, and a 
97.5% majority of the Exchange members.

The demutualization plan, which calls for the equity in the Exchange to 
remain with the seat-owners of its NYMEX Division, will make the Exchange the 
first in New York to convert from a not-for-profit membership structure to a 
for-profit organization.

Yesterday,s approval is the final step in repositioning the Exchange as a 
21st century business enterprise that will create and pursue profitable new 
opportunities, react rapidly and decisively in an increasingly competitive 
marketplace, and explore interest by outside investors. The Exchange expects 
to announce an effective date for the transaction shortly.

Once the demutualization is effective, the Exchange, a not-for-profit 
membership corporation under New York law, will be reorganized as a 
for-profit membership corporation under Delaware law and will be renamed New 
York Mercantile Exchange, Inc.  A new stock-holding company named NYMEX 
Holdings, Inc., will be formed to own all of the economic interests and most 
of the voting control in the for-profit membership corporation.  Each 
existing NYMEX Division membership will be converted into one share of common 
stock in NYMEX Holdings, representing equity in the overall organization, and 
one membership in the Exchange representing trading privileges.

The common stock and trading privileges will not be separable until a 
majority of stockholders vote to permit separate trading of the common stock 
and trading rights.



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