From: Ronald E. Komo
Nancy M. Morris, Secretary
To Whom it May Concern,
The CBOE contends that the contractual agreement with the BOT is terminated upon the completion of the merger of the BOT and CME. The position of the CBOE dictates that the BOT no longer exists as defined within the agreement.
The original agreement and subsequent agreements were entered into by the chairman and directors of the BOT representative of the BOT membership. The said agreement maintains that the shares of stock, trading right, and exercise right must be held altogether and registered in the members name. I am of the opinion that the merger does not cause a violation of the agreement, nor does it alter the structure of the entity.
I would specifically like to address the issue of the trading right as recognized by both the CBOE and BOT in the agreement. Upon approval of the merger, the BOT trading right only allows the holder to trade BOT products just as the CME trading right allows the holder to only trade CME products. The BOT trading right owner would be required to purchase or lease a CME trading right to trade CME products; likewise, the CME trading right holder would be required to purchase or lease a BOT trading right to trade BOT products.
Recognizing that the shares of stock, trading right, and exercise right are owned by the individual in possession of all three components, and the premise accepted by the CBOE as defined as such within the said agreement, the trading right pertaining to BOT products remains the same upon completion of the merger as it would prior to the merger. In other words, the stucture of the entity would not be altered post merger, thus substantiating the existence of the BOT within it's products.
I maintain that this nothing more than a circuitous attempt by the CBOE to enjoin the SEC in a ruse to deny the BOT exercise right owners of their legal ownership in the CBOE and an equal distribution entitled by the contractual agreement.
I respectfully request that this not be considered under the purview of the SEC; it is an issue of contract law under the jurisdiction of the courts.
Ronald E. Komo