thanks for the input...worst case scenario, I can always purchase new shares with the premium received & allow the old stock to be called. Still it is all very clumsy and highlights the lack of transparency in some of this stuff. The option exchanges really should get their acts together and do away with these so called non standard contracts.
Here is the information from the options clearing house. I can't see where the strike price is adjusted.
Back to Infomemo Search DATE: SEPTEMBER 29, 2008 SUBJECT: WENDY’S INTERNATIONAL, INC. - CONTRACT ADJUSTMENT OPTION SYMBOLS: WEN/WVE NEW SYMBOLS: JEK/WWV ADJUSTED SYMBOL: ZVY FUTURES SYMBOL: WEN1C NEW SYMBOL: WEN2C DATE: 9/30/08 Option Contract Adjustment DATE: September 30, 2008 OPTION SYMBOL: WEN changes to JEK WVE changes to WWV STRIKE PRICES: No Change NUMBER OF CONTRACTS: No Change MULTIPLIER 100 (e.g., a premium of 1.50 yields $150; a strike of 15 yields $1,500.00) NEW DELIVERABLE PER CONTRACT: JEK/WWV 425 (New) Wendy’s/Arby’s Group, Inc. (“WEN”) Common Shares ZVY 1) 425 (New) Wendy’s/Arby’s Group, Inc. (“WEN”) Common Shares 2) 135 Tim Hortons, Inc. (“THI”) Common Shares 3) $11.08 Cash CUSIP: WEN (New): 950587105 THI: 88706M103 SETTLEMENT: Regular PRICING The underlying price for JEK/WWV will be determined as follows: JEK = 4.25 (WEN) The underlying price for ZVY will be determined as follows: ZVY + 4.25 (WEN) + 1.35 (THI) + .1108 Futures Contract Adjustment DATE: September 30, 2008 FUTURES SYMBOL: WEN1C changes to WEN2C SETTLEMENT PRICES: No Change NUMBER OF CONTRACTS: No Change MULTIPLIER 100 (e.g., a premium of 1.50 yields $150) NEW DELIVERABLE PER CONTRACT: 425 (New) Wendy’s/Arby’s Group, Inc. (“WEN”) Common Shares CUSIP: WEN (New): 950587105 THI: 88706M103 SETTLEMENT: Regular PRICING The underlying price for WEN2C Futures contract deliverable, expressed in term of current market value, would be calculated as follows: WEN2C = 4.25 (WEN) Please note that the valuation would apply only to the WEN2C deliverable in terms of current market value of the deliverable securities. The resulting price would not be equivalent to the daily settlement price of a futures contract month, whose determination would include cost of money carrying charges, adjustment for dividends, and other factors. BACKGROUND On September 15, 2008, Shareholders of Wendy’s International, Inc. (“WEN”) voted concerning a proposed merger with Triarc Companies, Inc. (“TRY”). The merger was approved and subsequently consummated on September 29, 2008. As a result, Triarc, Companies Inc. will change its name to Wendy’s/Arby’s Group, Inc. (New “WEN”), and each existing WEN Common Share will be converted into the right to receive 4.25 (New) WEN Common Shares. Cash will be paid in lieu of fractional WEN shares. THE FOREGOING IS AN UNOFFICIAL SUMMARY OF THE TERMS OF THE MERGER, PREPARED BY OCC FOR THE CONVENIENCE OF CLEARING MEMBERS. OCC ACCEPTS NO RESPONSIBILITY FOR THE ACCURACY OR COMPLETENESS OF THE SUMMARY. CLEARING MEMBERS SHOULD REFER TO THE WEN/TRY JOINT PROXY STATEMENT PROSPECTUS DATED AUGUST 15, 2008, FOR THE AUTHORITATIVE DESCRIPTION OF THE MERGER AND ALL ITS TERMS AND CONDITIONS. Pursuant to Article VI, Section 11, of OCC's By-Laws, a panel of OCC's Securities Committee has determined to adjust all WEN/WVE/ZVY options as indicated above (the panel consists of two representatives from the Exchanges on which the affected option is traded (in this case, the Chicago Board Options Exchange (“CBOE”), the NASDAQ OMX PHLX (“PHLX”), the NYSE Arca Exchange (“ARCX”), the International Securities Exchange (“ISE”), and the Boston Options Exchange (“BOX”)) and the Chairman of OCC or his delegee, who only votes in case of a tie). Pursuant to Article XII Section 3 of OCC’s By-Laws all WEN1C futures will be adjusted as indicated above. CATEGORY: CONTRACT ADJUSTMENT SUB-CATEGORY: ANTICIPATED ADJUSTMENT For questions regarding this memo, call 1-888-OPTIONS or email email@example.com