<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1997
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to ______________
Commission File # 0-15187
Jack Carl/312-Futures, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-3399452
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 West Adams Street, Suite 1500, Chicago, Illinois 60606
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(312) 407-5726
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
X Yes ____ No
-----
As of March 31, 1997, the issuer had outstanding 32,945,851 shares of common
stock, $.004 par value per share.
This is page 1 of 20 sequentially numbered pages.
-1-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Immediately following this page, the following financial information of the
Registrant is filed as part of this Report.
Page
----
Consolidated statements of financial condition
as of March 31, 1997 and June 30, 1996. 3
Consolidated statements of operations for the
three months and nine months ended March 31,
1997 and 1996. 4-5
Consolidated statements of cash flows for the
nine months ended March 31, 1997 and 1996. 6-7
Notes to consolidated financial statements. 8-13
-2-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
ASSETS
<TABLE>
<CAPTION>
March 31, June 30,
1997 1996
----------- -------------
(Unaudited) (Audited)
<S> <C> <C>
Cash $ 6,867,900 $ 1,587,300
Cash segregated or secured under Commodity Exchange Act - 2,009,500
U.S. Government obligations 4,963,600 144,328,800
Other short term investments 105,727,600 28,856,100
Deposits with clearing organizations 672,200 43,488,500
Warehouse receipts - 959,500
Receivables:
Brokers and dealers 2,589,000 2,291,900
Clearing organizations - 12,383,200
March 31, June 30,
1997 1996
---------- -----------
Customers & counterparties $5,896,700 $1,138,400
Affiliates - 1,000
Other 1,053,900 1,061,800
Less - Allowance for doubtful accounts (455,700) (409,300) 6,494,900 1,791,900
---------- ------------
Notes receivable 625,700 627,200
Exchange memberships, at lower of cost or market 49,800 781,300
Furniture, equipment, and leasehold improvements, net 266,000 279,500
Other assets 353,400 503,000
------------ ------------
Total $128,610,100 $239,887,700
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Bank overdrafts $ 18,500 $ -
Payables:
Clearing organizations - 165,900
Brokers and Dealers 2,157,000 -
Customers and counterparties 111,855,400 216,705,300
Affiliates and employees 363,800 2,865,000
Accounts payable and accrued expenses 1,985,500 3,545,000
Notes payable 5,386,600 6,390,000
------------ ------------
Total 121,766,800 229,671,200
------------ ------------
Liabilities subordinated to claims of general creditors - 4,000,000
------------ ------------
Stockholders' equity:
Class A preferred stock, $1 par value; 10% cumulative,
redeemable, 400,000 shares authorized and outstanding - 400,000
Common stock, $.004 par value; 150,000,000 shares authorized,
32,945,851 and 33,624,530 shares issued and outstanding,
respectively 131,800 134,500
Paid-in capital 8,270,800 8,395,300
Retained deficit (1,513,600) (2,698,800)
Cumulative translation adjustment (45,700) (14,500)
------------ ------------
Total stockholders' equity 6,843,300 6,216,500
------------ ------------
Total $128,610,100 $239,887,700
============ ============
</TABLE>
See notes to consolidated financial statements.
-3-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
1997 1996
---- ----
<S> <C> <C>
Revenues:
Commissions $ 28,700 $ 8,077,700
Interest 1,251,100 1,970,400
Trading gains, net 2,474,500 871,600
Other 535,400 66,200
----------- -----------
Total revenues 4,289,700 10,985,900
----------- -----------
Expenses:
Commission, floor brokerage and clearing costs 46,800 4,358,600
Compensation and related benefits 901,400 2,718,100
Communications 160,700 547,200
Interest 955,200 1,084,700
Rent and other occupancy costs 213,100 375,700
Business promotion 177,400 567,700
Professional and consulting fees 120,300 197,500
Depreciation 36,000 82,000
Amortization of goodwill - 13,400
Other 156,000 734,600
----------- -----------
Total expenses 2,766,900 10,679,500
----------- -----------
Income before income taxes 1,522,800 306,400
Income tax expense 513,600 33,600
----------- -----------
Net income 1,009,200 272,800
Assumed cumulative dividend on Class A preferred stock (3,300) (10,000)
----------- -----------
Net income applicable to common stock $ 1,005,900 $ 262,800
=========== ===========
Primary earnings per common share:
Net income $ .03 $ .01
=========== ===========
Weighted average number of common shares outstanding 33,481,254 33,667,632
=========== ===========
Fully diluted earnings per common share:
Net income $ .03 $ .01
=========== ===========
Weighted average number of common shares 33,481,254 33,667,632
=========== ===========
</TABLE>
See notes to consolidated financial statements.
-4-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
---------------------------
1997 1996
---- ----
<S> <C> <C>
Revenues:
Commissions $ 161,500 $23,030,500
Interest 2,452,900 5,648,600
Trading gains, net 5,304,500 1,196,200
Other 2,183,900 150,300
----------- -----------
Total revenues 10,102,800 30,025,600
----------- -----------
Expenses:
Commission, floor brokerage and clearing costs 254,800 12,462,300
Compensation and related benefits 2,933,600 7,775,500
Communications 514,200 1,454,100
Interest 2,025,800 2,981,300
Rent and other occupancy costs 446,000 1,163,600
Business promotion 359,500 1,551,200
Professional and consulting fees 432,700 526,500
Depreciation 83,200 235,500
Amortization of goodwill - 40,200
Other 607,100 1,775,100
----------- -----------
Total expenses 7,656,800 29,965,300
----------- -----------
Income before income taxes 2,446,000 60,300
Income tax expense 824,200 149,800
----------- -----------
Net income (loss) 1,621,800 (89,500)
Assumed cumulative dividend on Class A preferred stock (23,300) (30,000)
----------- -----------
Net income (loss) applicable to common stock $ 1,598,500 $ (119,500)
=========== ===========
Primary earnings (loss) per common share:
Net income (loss) $ .05 $ (.00)
=========== ===========
Weighted average number of common shares outstanding 33,577,469 33,717,323
=========== ===========
Fully diluted earnings (loss) per common share:
Net income (loss) $ .05 $ (.00)
=========== ===========
Weighted average number of common shares outstanding 33,577,469 33,717,323
=========== ===========
</TABLE>
See notes to consolidated financial statements.
-5-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
-----------------------------
1997 1996
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net income (loss) $ 1,621,800 $ (89,500)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 83,200 275,700
Deferred taxes 7,600 (116,700)
Doubtful accounts expense (benefit) 46,400 25,100
Equity in net (gain) loss of affiliated partnerships - (6,400)
Gain on sale of exchange memberships, net (221,600) -
Writedown of exchange memberships 180,100 -
Gain on sale of clearing corporation stock (664,000) -
Changes in:
Cash segregated or secured under
Commodity Exchange Act, net 2,009,500 (3,340,200)
U.S. Government obligations 139,365,200 (46,496,300)
Other short term investments (76,871,500) (28,646,700)
Deposits with clearing organizations 42,456,300 22,897,000
Warehouse receipts 959,500 535,700
Receivables 7,336,700 3,911,600
Other assets 142,000 (48,400)
Payables (105,360,000) 52,847,700
Accounts payable and accrued expenses (1,559,500) (1,176,800)
------------- ------------
Cash provided by (used in) operating activities 9,531,700 571,800
------------- ------------
Cash Flows From Investing Activities:
Investments in and advances to affiliated partnerships, net - 36,100
Decrease in notes receivable 1,500 4,400
Purchase of furniture, equipment and leasehold improvements (185,900) (256,400)
Proceeds from the sale of exchange memberships 773,000 -
Proceeds from the sale of clearing corporation stock 1,024,000 -
Proceeds from the sale of furniture and equipment 116,200 -
------------- ------------
Cash provided by (used in) investing activities 1,728,800 (215,900)
Cash Flows From Financing Activities:
Increase in short term advance - 1,000,000
Repayment of short term advance - (1,000,000)
Repayment of notes payable (1,840,000) -
Increase in liabilities subordinated to
claims of general creditors - 1,750,000
Repayment of liabilities subordinated to
claims of general creditors (4,000,000) (690,000)
Repurchase of common stock (127,200) -
------------- ------------
Cash provided by (used in) financing activities (5,967,200) 1,060,000
------------- ------------
Effect of exchange rate changes on cash (31,200) (14,500)
------------- ------------
Increase in cash 5,262,100 1,401,400
Cash, beginning of period 1,587,300 1,034,900
------------- ------------
Cash (net of overdrafts), end of period $ 6,849,400 $ 2,436,300
============= ============
</TABLE>
See notes to consolidated financial statements.
-6-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Supplemental Schedule of Non-Cash Investing
and Financing Activities
Nine Months Ended March 31, 1997
- --------------------------------
In January, 1997, notes payable aggregating $4,550,000 due January 31, 1997
were extended to January 31, 1998.
Also in January, 1997, a note payable for $836,600 was issued to the
Company's principal stockholder as payment for the redemption of preferred stock
and dividends accrued theron.
Nine Months Ended March 31, 1996
- --------------------------------
In January, 1996, all notes payable aggregating $6,390,000 due January 31,
1996 were extended to January 31, 1997.
In February, 1996, $1,000,000 of a $1,690,000 subordinated loan was
extended to February 24, 1997. The remaining $690,000 was repaid.
-7-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
BASIS OF PRESENTATION
- ---------------------
The consolidated financial statements include the accounts of Jack
Carl/312-Futures, Inc. ("JC/312") and Subsidiaries, (collectively, the
"Company"). All material intercompany accounts and transactions have been
eliminated in consolidation. Until July 1, 1996, the Company engaged principally
in the business of effecting transactions in futures and options on futures
contracts for the accounts of customers and the operation of commodity pools.
Index Futures Group, Inc. ("Index"), until July 1, 1996, was the principal
operating subsidiary of JC/312. Effective July 1, 1996, Index sold, transferred
and assigned substantially all of its brokerage accounts ("Sale of Assets") to
E.D. & F. Man International Inc. ("MINC"). Index ceased being a registered
futures commission merchant with the Commodity Futures Trading Commission
("CFTC") in December, 1996. IFX, Ltd. ("IFX"), (formerly Index FX, Ltd.), a
British corporation and a wholly owned subsidiary of JC/312, continues to
conduct foreign exchange business as a registrant of the British Securities and
Futures Authority. Another subsidiary of JC/312 was a registered broker-dealer
until it withdrew its registration in April 1997.
These consolidated financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to rule 10-01 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
considered necessary for a fair presentation have been reflected in these
condensed consolidated financial statements. Operating results for the quarter
are not necessarily indicative of the results that may be expected for the year
ending June 30, 1997. Certain reclassifications have been made in the 1996
financial statements to conform to the 1997 presentation. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's financial statements on Form 10-K for the year
ended June 30, 1996.
-8-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
COMMITMENTS AND CONTINGENCIES
- -----------------------------
LITIGATION-
-----------
The Company is a defendant in, and may be threatened with, various legal
proceedings arising from its regular business activities. Management, after
consultation with legal counsel, is of the opinion that the ultimate liability,
if any, resulting from any pending action or proceedings will not have a
material effect on the financial position or results of operations of the
Company.
The Company was defending against an arbitration filed by a former client
to recover damages of $1,000,000 alleging misrepresentation of risk and
unauthorized trading. The client's actual losses were approximately $850,000. In
July, 1996, an arbitration panel dismissed the claim.
In April, 1994, Index, without admitting or denying the allegations, paid
$100,000 to the CFTC, settling an administrative action, filed on September 29,
1992. In a related action, the equity receiver of an alleged commodity pool
operator brought an action to recover losses of approximately $600,000, alleging
various theories such as constructive trust, negligence, breach of fiduciary
duty and conversion. On May 29, 1996, the district judge dismissed all claims
against Index. The Seventh Circuit has rejected the Supplemental Plaintiff's
appeal on procedural grounds, pending a final order from the district judge.
A former officer of Index whose employment was terminated as a result of
the Sale of Assets has rejected Index's severance payment offer. The officer has
made a demand for $500,000, and has threatened, but not yet instituted,
litigation, if a satisfactory offer of settlement is not made. The Company
believes that its original severance offer was reasonable and the officer's
claims are without merit.
-9-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
OTHER-
------
In connection with the Sale of Assets, if certain conditions occur over the
next two years, the Company may be subject to additional severance payments of
up to $517,400.
The Company had guaranteed performance under the Commodity Exchange Act of
certain introducing brokers with respect to their customer accounts. In
connection with the Sale of Assets, these introducing broker guarantees were
terminated or transferred to MINC effective July 1, 1996.
Index issued a limited indemnification agreement to MINC related to the
Sale of Assets. This agreement covers potential customer claims arising from
activity prior to the sale.
Under their original employment contracts, the three key salesmen of IFX,
(who were primarily responsible for establishing the business of IFX), were
entitled to 50% of pre-tax profits of IFX, one-half of which was payable
quarterly with the remaining one-half payable at the end of the fiscal year,
adjusted for subsequent losses, if any. These salesmen were also entitled to
share in up to 50% of any premium, as defined, which might be generated if a
change in ownership of IFX occurred, depending upon when such a change happened.
Since the time these contracts were entered into, business at IFX has grown
substantially, requiring that JC/312 provide additional capital for regulatory
purposes to IFX. Additionally, one of these salesmen was terminated.
In March, 1997, JC/312 and IFX re-negotiated the employment contracts of
its two remaining principal salesmen, who are also directors of IFX. As a result
of this re-negotiation, their existing employment contracts were terminated and
new ones were executed.
Under the new arrangement, the remaining two key salesmen receive a salary
rather that a profit share, and are no longer automatically entitled to share in
any premium generated if there is a change in ownership of IFX. However, they
have expressed
-10-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
an interest in purchasing approximately 49% interest in IFX, via an off-shore
corporation which they own, and JC/312 has tentatively agreed to this. Terms of
this purchase have yet to be finalized, but are expected to be completed by
year-end. It is proposed that these key salesmen will purchase new convertible
Class B shares of IFX directly from IFX, for $2,500,000. To fund this purchase,
they may borrow $1,000,000 from JC/312 (secured by the stock being purchased)
and may issue IFX a promissory note for the remaining $1,500,000 of the purchase
price. Repayment of both notes would come from the cash flow generated by
dividends expected to be declared by IFX on futures earnings of that company.
In settlement of their original employment contracts, the two remaining key
salesmen have agreed to accept the one-half of profit share which was payable to
them quarterly for the first nine months of the year ending March 31, 1997,
($641,000 less draws previously taken) and to waive any rights to the one-half
($641,000) which would have been due them at June 30, 1997. As IFX had been
accruing the one-half which would have been due them in June on a monthly basis,
it was able to reduce its compensation and related benefits expense by $641,000
this quarter, as a result of this settlement. The third salesman who was
terminated received full settlement under the terms of his contract in February,
1997.
NOTES PAYABLE
- -------------
In September, 1996, the Company repaid $900,000 of notes payable to its
former President and a former Director.
In January, 1997, the Company repaid $940,000 of notes payable to the
principal stockholder. The Company also extended the maturity of the remaining
notes payable to an affiliate, aggregating $4,550,000, to January 31, 1998.
-11-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
STOCKHOLDERS' EQUITY
- --------------------
Class A Preferred Stock
On January 31, 1997, the Company redeemed and retired the 400,000 issued
and outstanding shares of its Class A preferred stock, all of which were owned
by its principal stockholder. The preferred stock was redeemed at a price equal
to the aggregate par value thereof plus the cumulative but previously undeclared
and unpaid dividends thereon, totaling $836,600. As payment, the Company issued
its principal stockholder a promissory note bearing interest at the prime rate
and maturing on January 31, 1998.
Common Stock
On March 13, 1997, the Company repurchased and retired 678,679 shares of
its common stock for $127,300. The purchase was done pursuant to a repurchase
program which allows for the Company to purchase up to 5,000,000 shares of
common stock before June 30, 1997.
An additional 1,462,500 shares of common stock were repurchased by the
Company on April 10, 1997 for $190,125. These shares were also retired.
RELATED PARTY TRANSACTIONS
- --------------------------
In November, 1996, the Company entered into a one-time inventory financing
transaction with an affiliated Company. The amount financed of $346,100, plus
$22,100 in interest, was repaid to the Company in January, 1997. The interest
is included in other revenue on the Statements of Operations.
SALE OF ASSETS
- --------------
The purchase price payable by MINC in connection with the Sale of Assets is
based on a percentage of the net income, as defined in the Sales Agreement, of
the transferred activities during the sixty-six month period following the sale.
-12-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
During the three months and nine months ended March 31, 1997, the Company
earned $509,900 and $1,226,300 respectively from the Sale of Assets. Such
earnings are included in other revenue in the Statements of Operations.
As a result of the Sale of Assets, the Company no longer has a need to own
exchange memberships, and is currently in process of selling them. During the
three months and nine months ended March 31, 1997, the Company recorded a $9,000
gain and an $885,600 net gain, respectively, on the sale of certain exchange
memberships and clearing corporation stock. These amounts have been included in
other revenue in the Statements of Operations. The Company has reflected its
investment in the remaining exchange memberships at the lower of cost or market
value to more closely approximate current liquidation value. As such, the
Company recorded a loss on the write-down of its remaining memberships of
$180,100 during the nine months ended March 31, 1997. This amount is included
in other expenses in the Statements of Operations.
CAPITAL REQUIREMENTS
- --------------------
Until December, 1996, Index was subject to the minimum capital requirements
adopted and administered by the Commodity Futures Trading Commission ("CFTC")
and by certain exchanges of which it was a member. Index has since withdrawn
its registration as a futures commission merchant and, as such, is no longer
subject to minimum capital requirements.
IFX became a registrant of the British Securities and Futures Authority
("SFA") during November, 1996. As such, IFX is subject to the financial
resources requirements adopted and administered by the SFA. As of March 31,
1997, IFX's financial resources, as defined by the SFA, were $5,444,000, which
was $836,000, in excess of its requirements.
-13-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS FOR THE PERIOD ENDED MARCH 31, 1997.
Jack Carl/312-Futures, Inc. ("JC/312"), (which when consolidated with its
subsidiaries is henceforth referred to as the "Company") is a holding company
which operates its business through its subsidiaries. Index Futures Group, Inc.
("Index"), until July 1, 1996, the Company's principal operating subsidiary,
provided a full range of futures brokerage, clearing and back office services
for institutional and public commodity traders. It was a clearing member of all
major U.S. commodity exchanges. Effective July 1, 1996, Index sold, transferred
and assigned substantially all of its brokerage accounts ("Sale of Assets") to
E.D.& F. Man International, Inc. ("MINC"). As a result of the Sale of Assets,
Index no longer acts as a futures commission merchant. It immediately withdrew
as a clearing member from all commodity exchanges, and terminated its
registration as a futures commission merchant in December, 1996. IFX, Ltd.
("IFX") (formerly Index FX, Ltd.), a British corporation and a subsidiary of
Jack Carl/312-Futures, Inc., continues to conduct foreign exchange business as a
registrant of the British Securities and Futures Authority ("SFA"). IFX
commenced trading operations in October, 1995 and became an SFA registrant in
November, 1996. The other subsidiaries of Jack Carl/312-Futures, Inc. and Index
currently have minimal operations.
Also, pursuant to the Sale of Assets agreement, Index is in the process of
changing its name to FX Chicago, Inc. The Company is in the process of changing
its name to IFX Corporation.
FINANCIAL CONDITION
- -------------------
The Company's cash and short-term investment portfolio totaled $117,559,000
at March 31, 1997. Included in this amount is $106,910,000 of funds from IFX
customers, which have been invested by IFX on the customers' behalf or are held
in segregated cash accounts, pursuant to rules of the SFA. The Company's
positions are generally liquid. The portfolio is invested primarily in U.S.
dollar denominated securities, but also includes foreign currency positions
deposited by IFX customers.
-14-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
As a registrant, IFX is subject to the financial resources requirements
adopted and administered by the SFA. As of March 31, 1997, IFX's financial
resources, as defined by the SFA, were $5,444,000, which was $836,000 in excess
of its requirements.
For the nine months ended March 31,1997, cash provided by operations was
$9,531,700 compared to $571,800 for the same period in fiscal 1996. The majority
of cash generated from operations is due to the Sale of Assets, as well as the
expanding business at IFX. Cash generated from the Sale of Assets has been
used to repay notes payable and a subordinated loan, as well as repurchase
shares of the Company's common stock.
As of March 31, 1997, the Company had $5,386,600 of notes payable to its
principal stockholder or an affiliate. Stockholders' equity at March 31, 1997
was $6,843,300. On January 31, 1997, the Company redeemed and retired the
400,000 issued and outstanding shares of its Class A preferred stock, all of
which was owned by its principal stockholder. The preferred stock was redeemed
at a price equal to the aggregate par value thereof plus the cumulative but
previously undeclared and unpaid dividends thereon, totaling $836,600. As
payment, the Company issued its principal stockholder a promissory note bearing
interest at the prime rate and maturing on January 31,1998. On March 13, 1997,
the Company repurchased and retired 678,679 shares of its common stock for
$127,300. The purchase was done pursuant to a repurchase program which allows
for the Company to purchase up to 5,000,000 shares of common stock before June
30, 1997. Subsequent to March 31, 1997, an additional 1,462,500 shares of common
stock were repurchased by the Company for $190,125. These shares were also
retired.
Management believes existing cash and short-term investments together with
operating cash flows, access to equity capital, and borrowing capacity, provide
adequate resources to fund ongoing operating requirements and future capital
expenditures related to the expansion of existing businesses and development of
new projects.
RESULTS OF OPERATIONS
- ---------------------
As a result of the Sale of Assets in July, 1996, Index no longer acts as a
futures commission merchant. Differences noted when comparing revenues and
expenses for the three and nine-month periods ending March 31, 1997 and March
31, 1996 are largely a result of the Sale of Assets, unless otherwise noted
below.
-15-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
Revenues were $4,289,700 in the third quarter of fiscal 1997, a decrease of
61% from the third quarter of fiscal 1996. Year-to-date, total revenues were
$10,102,800, or 66% lower than the comparable period of the prior fiscal year.
The decrease in revenues as resulting from the Sale of Assets has been offset
somewhat by the increasing revenues from IFX.
Trading gains increased by $1,602,900 and $4,108,300 during the quarter and
nine months ended March 31, 1997, respectively, compared to the same period a
year ago. The primary component in trading gains in fiscal 1997 is the revenue
from IFX.
Other revenue increased $469,200 during the quarter ended March 31, 1997,
compared to same period a year ago. Included in other revenue for the quarter
ended March 31, 1997 is a gain of $509,000 from the Sale of Assets. Other
revenue increased $2,033,600 during the nine months ended March 31, 1997,
compared to the same period a year ago. Included in other revenue for the nine
months ended March 31, 1997 is a net gain of $885,600 on the sale of clearing
corporation stock and exchange memberships, $1,226,300 from the Sale of Assets,
and $22,100 of interest from a one-time inventory-financing transaction.
Total expenses were $2,766,900 in the third quarter of fiscal 1997, a
decrease of 74% from the third quarter of fiscal 1996. Year-to-date, total
expenses were $7,656,700, or 74% lower than the comparable period of the prior
fiscal year. The decrease in expenses as resulting from the Sale of Assets has
been offset somewhat by the increasing expenses from the expanding operations of
IFX. The expenses for fiscal 1997 reflect the ongoing expenses of IFX, JC/312
and Index, transitional expenses from the Sale of Assets, and minimal expenses
for other subsidiaries.
Under their original employment contracts, the three key salesmen of IFX,
(who were primarily responsible for establishing the business of IFX), were
entitled to 50% of pre-tax profits of IFX, one-half of which was payable
quarterly with the remaining one-half payable at the end of the fiscal year,
adjusted for subsequent losses, if any. These salesmen were also entitled to
share in up to 50% of any premium, as defined, which might be generated if a
change in ownership of IFX occurred, depending upon when such a change happened.
Since the time these contracts were entered into, business at IFX has grown
substantially, requiring that JC/312 provide additional capital for regulatory
purposes to IFX. Additionally, one of these salesmen was terminated.
-16-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
In March, 1997, JC/312 and IFX re-negotiated the employment contracts of
its two remaining principal salesmen, who are also directors of IFX. As a result
of this re-negotiation, their existing employment contracts were terminated and
new ones were executed.
Under the new arrangement, the remaining two key salesmen receive a salary
rather that a profit share, and are no longer automatically entitled to share in
any premium generated if there is a change in ownership of IFX. However, they
have expressed an interest in purchasing approximately 49% interest in IFX, via
an off-shore corporation which they own, and JC/312 has tentatively agreed to
this. Terms of this purchase have yet to be finalized, but are expected to be
completed by year-end. It is proposed that these key salesmen will purchase new
convertible Class B shares of IFX directly from IFX, for $2,500,000. To fund
this purchase they may borrow $1,000,000 from JC/312 (secured by the stock being
purchased) and may issue IFX a promissory note for the remaining $1,500,000 of
the purchase price. Repayment of both notes would come from the cash flow
generated by dividends expected to be declared by IFX on futures earnings of
that company.
In settlement of their original employment contracts, the two remaining key
salesmen have agreed to accept the one-half of profit share which was payable to
them quarterly for the first nine months of the year ending March 31, 1997,
($641,000 less draws previously taken) and to waive any rights to the one-half
($641,000) which would have been due them at June 30, 1997. As IFX had been
accruing the one-half which would have been due them in June on a monthly basis,
it was able to reduce its compensation and related benefits expense by $641,000
this quarter, as a result of this settlement. The third salesman who was
terminated received full settlement under the terms of his contract in February,
1997.
The Board of Directors is exploring various business opportunities for the
Company now that Index no longer acts as a futures commission merchant.
Inventory financing is one of the businesses currently under consideration. In
November, 1996, the Company entered into a one-time inventory financing
transaction. $22,100 earned from this transaction is recorded in other revenue.
As a result of the aforementioned revenues and expenses, net income for the
quarter ended March 31, 1997 is $1,009,200 or $.03 per share compared to a net
income of $272,800 or $.01 per share for the same period a year ago.
-17-
<PAGE>
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
Net income for the nine months ended March 31, 1997 is $1,621,800 or $.05
per share compared to net loss of $89,500 or less than $.01 per share for the
same period a year ago.
-18-
<PAGE>
ITEM 1. LEGAL PROCEEDINGS
See Notes to Financial Statements.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
10.51 Termination Letters dated November 28, 1996 between IFX and Simon
Drabble
10.52 Terms of Employment dated January 1, 1997 between IFX and Charles
Romilly
10.53 Memorandum of Agreement dated March 12, 1997 between IFX and
Lorenzo Naldini and Graham Wellesley
10.54 Service Agreement dated March 12, 1997 between IFX and Graham
Wellesley
10.55 Service Agreement dated March 12, 1997 between IFX and Lorenzo
Naldini
10.56 Settlement Letter dated April 22, 1997 between IFX and Lorenzo
Naldini
10.57 Settlement Letter dated April 22, 1997 between IFX and Graham
Wellesley
11.1 Computation of Earnings Per Share is attached.
(B) REPORTS ON FORM 8-K
No reports on Form 8-K were filed by the Company during the quarter
ended March 31, 1997.
-19-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Jack Carl/312-Futures, Inc.
---------------------------
(Registrant)
Dated: May 14, 1997 By: /S/ ALLYSON LAACKMAN
------------------------------
Allyson Laackman
Chief Financial Officer
-20-
<PAGE>
Exhibit 10.51
[Letterhead of Index FX Ltd.]
28th November 1996
Simon Drabble Esq.
Dublin Farmhouse
Wherwell
Andover
Hampshire SP11 7PJ
Dear Simon
Further to our recent conversations, I write to confirm that Index FX Ltd. ("the
Company") gave to you formal notice of termination of your Service Agreement
with immediate effect on 19th November 1996.
We have agreed that the Company will pay to you damages for breach of contract
amounting to 20% of Net Income, as defined in your Service Agreement, in respect
of the period 1st October 1996 to 19th February 1997 and Graham Wellesley and
Lorenzo Naldini have agreed to this.
The Company hereby agrees to pay to you (Pounds)30,000 by way of an advance
against the above damages and agrees not to invoke the clawback provisions
contained in Clause 3 (b).
In the event of a dispute regarding the level of overhead during the period 1st
October 1996 to 19th February 1997 we have agreed that Messrs. Arthur Andersen
shall act as arbitrator in determining if such overhead is both fair and
reasonable.
Please sign and return the enclosed copy of this letter by way of acknowledgment
and agreement that the above damages will be in full settlement of all
liabilities we may have to you or vice versa, that the Clauses 7 - 9 of your
Service Agreement will continue to apply from 19th November 1996 (save for those
clients listed attached hereto in Appendix A who we are agreed you may approach
directly after 20th February 1997, in the event that you remain in the same
industry and commence employment elsewhere) and that if you break any of these
provisions you will repay to the Company such amount in damages which will be
calculated on the basis of harm done.
Yours sincerely
/s/ Charles Romilly
Charles Romilly
Director
[Letterhead of Index FX Ltd.]
<PAGE>
I acknowledge receipt of the above letter of which this is a copy and confirm
that on receipt of the payments referred to I will have no claims against either
of you or any liabilities to you.
/s/ Simon Drabble
Simon Drabble
<PAGE>
Exhibit 10.51
(continued)
38 SANTOS ROAD
LONDON SW18 1MS
28th November 1996
Simon Drabble Esq.
Dublin Farmhouse
Wherwell
Andover
Hampshire SP11 7PJ
Dear Simon
Following our recent conversations we write to confirm that notwithstanding the
termination of your employment by Index FX Ltd. ("the Company") on 19th November
1996, we agree that the Company will pay to you damages for breach of contract
amounting to 20% of the Team's Net Income, as defined in your Service Agreement,
less an advance payment of (Pounds)30,000, for the period 1st October 1996 to
19th February 1997.
Please sign and return the enclosed copy of this letter agreeing to the above
and that the above damages will be in full and final settlement of all
liabilities we may have to you or vice versa.
Yours sincerely
/s/ GRAHAM WELLESLEY /s/ LORENZO NALDINI
- ------------------------------------- -----------------------------------
Graham Wellesley Lorenzo Naldini
I acknowledge receipt of the above letter of which this is a copy and confirm
that on receipt of the payment referred to I will have no claims against either
you or any liabilities to you.
/s/ SIMON DRABBLE
- -------------------------------------
Simon Drabble
<PAGE>
Exhibit 10.51
(continued)
Analysis as of 2/28/97
<TABLE>
<CAPTION>
Total Graham Lorenzo Simon
<S> <C> <C> <C>
Total Profit Share thru 1/31/97 1,110,938 888,750 222,188
Adjustment to January posted in
February (114) (91) (23)
20% of Net Income per Barrie Swifts
daily income sheet thru the 19th
of February 104,751
Less: 20% of #19/28ths of Operating
Expenses for the month (41,886)
Less: 20% of #19/28ths of Staff
Bonuses (6,921)
Less: 20% of #19/28ths of $4,200
proforma salary adjustment (570)
Less: 20% of #19/28ths of Charles Romilly's
income-based bonus (2,509)
Less: 20% of 19/28ths of Charles
Romilly's Rebate-based bonus (288)
-------------------------------------
Profit Split for February 316,333 263,756 52,577
Distributions:
July Draw (25,707) (17,138) (8,569)
August Draw (25,706) (17,137) (8,569)
September Draw (25,882) (17,106) (8,553)
October Split Payout (171,031) (147,475) (23,556)
October Draw (26,901) (17,934) (8,967)
November Draw (18,616) (18,531)
December Draw (18,905) (18,905)
January Draw (21,638) (21,638)
February Draw (21,201) (21,201)
(2,000)
-------------------------------------
Total Payments (355,587) (297,066) (60,214)
-------------------------------------
Breech of contract payment due
(thru 1/31) 1,071,570 855,349 214,528
=====================================
Less: portion of redundancy
payment not subject to tax (50,448)
--------
Gross due Simon (before NI) 164,080
NI (17,064)
--------
Payment due Simon 147,016
========
</TABLE>
We the understand agree, that the above amount due Simon Drabble, of $147,016
less PAYE tax and Employee National Insurance, if any, represents the full and
final settlement in all matters between Simon Drabble and Lorenzo Naldini,
Graham Wellsley & IFX Limited.
/s/ Simon Drabble
- ------------------------------------------
Simon Drabble
/s/ Graham Wellsley
- ------------------------------------------
Graham Wellsley
/s/ Lorenzo Naldini
- ------------------------------------------
Lorenzo Naldini
/s/ Allyson Laackman
- ------------------------------------------
IFX Limited, by Allyson Laackman, Chairman
<PAGE>
EXHIBIT 10.52
(COMPANY LOGO)
January 1, 1997
Charles Romilly Esq.
5 Poyntz Road
Battersea
London SW11 5BH
Dear Charles:
I am pleased to offer to you the position we discussed for a minimum contract
period of 16 months. I have described below the terms of such employment. If you
would like to accept this position, please sign and return the attached copy of
this letter.
The following particulars are given to you pursuant to Part 1 of the Employment
Protection (Consolidation) Act 1978 (as amended by subsequent legislation).
1. The parties are as follows:
Your employer ("The Employer") is:
IFX Ltd.
American House, 2 America Square
London EC3N 2LU
Name and address of employee ("The Employee") is:
As Above.
2. Description of employment:
Your job title is Director and Company Secretary.
Your responsibilities will be those of a Salesperson as well as a Company
Secretary and Director. Your duties will be typical for someone of such a
position, and may include specific duties that may be assigned to you in the
future by the Board of Directors, as appropriate for someone of this position.
It is understood that the position of Company Secretary is a part-time position,
with the balance of your time spent in the sales function.
3. Place of employment.
(COMPANY LETTERHEAD)
<PAGE>
Your working hours will be 8:00 a.m. to 6:00 p.m., Mondays to Fridays
inclusive, although you may be required to work outside of these hours
and days, when the needs of the business so dictate.
(c) Holidays.
(i) You are entitled to bank and other public holidays, plus twenty
five (25) working days holiday with pay each year.
(ii) The qualification year for holiday purposes is from 1st January
to 31st December inclusive and all holidays must be taken within
this period and at a time convenient to the Employer.
(d) Sickness and injury.
(i) If you are absent from work due to sickness or injury you must
inform Barrie Swift as soon as possible during the first working
day.
(ii) For periods of sickness or injury between 4 and 6 days the
Employee must produce a self-certification certificate and a
doctor's certificate covering longer periods of absence from
work. The Employer reserves the right to request that the
Employee present doctors certificates for periods of less than 6
days absence. Any expenses incurred by the Employee in
compliance with such request will be reimbursed by the Employer.
(iii) The Employer will pay the Employee's salary during periods of
sickness or illness for up to six (6) weeks in any period of
twelve (12) months (thereby discharging the Employer's liability
to pay statutory sick pay) less any sickness or injury benefits
received by the Employee from the DHSS or monies received under
any health insurance schemes.
(iv) Should the Employee remain absent after the expiry of this
period the Employer will review individual cases and may
continue to pay a proportion of the salary for such period as it
may determine. See(f)(iii) below for further details.
(v) Absence due to maternity leave will not be subject to (iii)
above and the statutory regulations will apply.
(vi) If the Employee is absent through sickness or injury as a result
of action by a third party and a successful claim is made
against the third party, the Employer reserves the right to
claim from the Employee a
<PAGE>
The place of your employment is America House, 2 America Square, London
EC3N2LU, or wherever the headquarters of IFX, Ltd. are located.
4. Commencement of employment:
(a) The date of commencement of employment will be Thursday 2nd January
1997,
(b) No employment with a previous employer counts as part of your period of
continuous employment.
5. The following are the particulars of your employment as at the date of this
letter:
(a) Remuneration.
(i) The rate of your remuneration is a salary of (POUNDS)25,000 per
annum, paid monthly in arrears.
(ii) Your remuneration will be increased to (POUNDS)65,000 with
effect from 1st January 1998.
(iii) You will be entitled to receive a bonus of 2.625% of the Net
Income of the Company, before employee bonuses, payout to the
Partners and Corporation Tax, but after the discretionary bonus
described in (iv) below and, for the first 12 months, a monthly
reduction of $4,200. Employer National Insurance will be deducted
from any such payment. A monthly draw of approximately
(POUNDS)2,500 may be taken against this bonus accrual. The
remainder of the bonus will be paid each quarter, after the books
have been closed. If the business you introduce (as mutually
agreed upon by the Board of Directors) exceeds 20% of the
Company's business, defined by gross revenue on a quarterly
basis, your bonus will increase to 5% for that period.
(iv) You will be entitled to receive a discretionary bonus, to be
determined by the Board of Directors at the end of this contract.
In determining the amount of this bonus, the Board of Directors
will review all accounts which you have directly or indirectly
introduced to the Company, applying a benchmark of $15 per
million traded and using its discretion to adjusted the bonus up
or down depending on the profitability of each such account and
your level of assistance in attracting and maintaining the
account. This bonus will be paid to you, after deducting National
Insurance, by the 31st of May, 1998.
(v) You will be entitled to receive 50% of the net futures and
options commissions paid by clearing clients and 15% of any
execution commissions paid by give-up clients introduced by
yourself to the Company.
(vi) In the event that you find a purchaser for some or all of the
Company's shares or you introduce a new shareholder you will be
entitled to receive a fee amounting to 4% of the total
consideration.
(b) Hours.
<PAGE>
sum representing the amount received as salary by the Employee during
his or her absence.
(e) The Employer will provide private health insurance.
(f) Notice.
(i) This contract will be reviewed before 30th of April, 1998. In the
event that this contract is terminated at such time, you will be
entitled to receive a one-time severance payment of
(POUNDS)65,000, payable to you or your designee. You will also be
entitled to receive monthly volume credit rebates of $15 per
million (or such amount as may be agreed by yourself and the
Board of Directors, based on the profitability of these accounts)
on the Ashraf, Joe Lewis and EBT accounts (including the related
sub-accounts of these three customers) for two years following
the termination of this contract, provided you do not elect to
take such accounts with you. Additionally, you will continue to
receive payments for commissions on futures, options of futures
and give-ups (as described in (a)(v) above) for two years. All
such payments (the trails and the one time severance payment) are
subject to compliance with the terms of the non-competition
clause as set forth below in (g). Management may elect to extend
these payments beyond the two year period, based upon its
assessment of your participation in that business remaining at
the Company following your departure.
(ii) In the case of gross misconduct the Employer reserves the right
to instant dismissal.
(g) Confidentiality and Non-Competition.
By acceptance of your employment with the Company you agree, at any
time, whether during your employment or at any time after its
termination, not to:
(i) Divulge or communicate any trade secrets of the Employer to any
person, firm or company whatsoever.
(ii) Divulge the names and addresses of any customers of the Employer.
(iii) Take any steps which may prejudice or harm the business of the
Employer and you agree to use your best endeavors to prevent the
publication of or disclosure of any information concerning
matters of the Employer.
(iv) Solicit any customers of Company, as defined by the active
customer list at the time of termination of this contract, for a
period of not less than two years from such date, except that you
may elect to take the Ashraf, Joe Lewis and EBT accounts,
including the related sub-
<PAGE>
accounts with you in lieu of receiving the $15 per million trail
on these accounts, as described in (f)(l) above. Failure to
comply with this requirement would result in severe damage to the
Company, and accordingly, the Company would seek remedy in a
court of law.
On termination of your employment you will procure that all papers,
documents and other property which may be in your possession relating
to the Employer, its business or affairs and any copies thereof shall
be handed back to the Employer on demand.
(h) Disciplinary Rules and Grievance Procedure.
If you have any grievance relating to your employment then you should
raise it direct with myself.
(i) Amendments.
These particulars may be changed by written notice to the Employee.
Yours sincerely,
/s/ Allyson Laackman
For and on behalf of IFX Ltd.
Allyson Laackman
Chairman
I delightedly and with extreme pleasure accept the terms of employment as set
forth in this document.
/s/ Charles Romilly
- ---------------------------
<PAGE>
EXHIBIT 10.53
Memorandum of Agreement
Whereas the parties entered into a Heads of Agreement together with Simon
Drabble on the 19th day of July 1995 (the "Heads of Agreement").
Simon Drabble ceased to be a Director or Employee of IFX Ltd. (formerly Index FX
Ltd. the "Company") on the 19th November 1996.
The Parties have agreed to terminate the Heads of Agreement with effect from
31st March 1997 and IFX Ltd. and each of Graham Wellesley ("GW") and Lorenzo
Naldini ("LN") have agreed to terminate the employment contracts between IFX
Ltd. and each of GW and LN, dated 13th November 1995, with effect from the same
date.
Now It Is Agreed:
The Heads of Agreement and the employment contracts of each of GW and LN with
IFX Ltd. shall be deemed to have been terminated on the 31st day of March 1997
and shall be of no further effect save with regard to matters occurring during
the course of those agreements and save that obligations of confidentiality,
secrecy and restrictive covenants applicable to any party shall continue in
force in accordance with the terms of the relevant agreements. Notwithstanding
the termination of these employment contracts each of GW and LN shall continue
to be directors of IFX Ltd.
The Parties have signed this Memorandum of Agreement as a Deed by way of
acknowledgment of their prior verbal agreements to terminate the Heads of
Agreement and the employment contracts on the terms set out above and with
effect from 31st March 1997.
/s/ Jack Carl/312 Futures, Inc. by
Allyson Laackman, CFO
- -------------------------------------------
Jack Carl/312 Futures, Inc.
/s/ Lorenzo Naldini
- -------------------------------------------
Lorenzo Naldini
/s/ Graham Wellesley
- -------------------------------------------
Graham Wellesley
/s/ Charles Romilly
- -------------------------------------------
IFX Ltd.
Dated this 12th day of March 1997.
<PAGE>
Dated 12th March 1997
EXHIBIT 10.54
SERVICE AGREEMENT
Between
IFX LIMITED
And
MR GRAHAM WELLESLEY
M.W. Cornish & Co
Solicitors
11 Old Jewry
London EC2R 8DU
<PAGE>
SERVICE AGREEMENT
Dated 12th March 1997
PARTIES
(1) IFX LIMITED whose registered office is at America House, 2 America Square,
London EC3N 2LU (the "Company"); and
(2) MR GRAHAM WELLESLEY of 38 Santos Road, London SW18 1MS (the "Executive").
1. INTERPRETATION
In this Agreement:-
(a) the "Board" means the board of directors of the Company;
(b) the "Commencement Date" means the 12th day of March 1997;
(c) the "Group" means:
(i) the Company;
(ii) the Company's holding company (if any);
(iii) any other subsidiary of the Company or the Company's
holding company; and
(iv) any other company in which the Company is interested and whose name
is notified to the Executive by the Company as being a member of the
Group
and (where the context so admits) includes any member of the Group.
For this purpose "holding company" and "subsidiary" have the meanings given
to them by sections 736, 736A and 736B of the Companies Act 1985;
<PAGE>
(d) the "Termination Date" means the date on which the Executive's employment
under this Agreement ceases;
(e) reference to any statutory provision includes a reference to that provision
as amended, extended or re-enacted and to any statutory replacement thereof
(either before or after the date of this Agreement).
2. APPOINTMENT, TERM AND CONTINUITY
(a) Subject to the provisions of this Agreement, the Executive is appointed and
shall serve the Company as a Director from the Commencement Date until his
employment is terminated by either party giving to the other not less than
three months' notice expiring at any time.
(b) The Executive's period of continuous employment with the Company for the
purposes of the Employment Protection (Consolidation) Act 1978 commenced on
13th November 1995.
3. REMUNERATION
The Executive shall be entitled to salary of US$100,000 per annum, paid
monthly in arrears.
4. EXPENSES
The Company shall reimburse the Executive all reasonable out of pocket
expenses properly incurred by him on the Company's business and evidenced
to the Company's reasonable satisfaction provided that such expenses shall
not exceed such amounts as may be agreed from time to time unless approved
in advance.
5. DUTIES
(a) The Executive shall act as a broker in spot and forward foreign exchange in
the inter-bank market and as a introducer of clients to other Group
companies in relation to on-exchange futures and options broking and
clearing business. The Executive shall also perform such other duties and
exercise such powers as are consistent with his appointment and as are from
time to time given to him by the Board and shall use his best endeavours to
further the interests of the Group. The
<PAGE>
Executive shall comply with all policies and directives of the Board and
the rules of the Securities and Futures Authority Limited ("SFA") and in
particular personal account dealing and other regulatory notices and
requirements in compliance with the SFA rules.
(b) Without prejudice to sub-clause (a) the Executive shall at all times keep
the Board fully informed of his conduct of his duties on behalf of the
Company and, as the case may be, of any other member of the Group when
appropriate and shall promptly provide such information and explanations as
may be requested from time to time by the Board.
(c) The Executive's normal working hours shall be 8.30 a.m. to 6.30 p.m. on
Mondays to Fridays inclusive with one hour for lunch and he shall devote
such further time as may be necessary for the proper performance of his
duties. Pressure of work may well necessitate that longer hours are worked.
(d) The Company may require the Executive to perform his duties anywhere within
or outside the United Kingdom in the ordinary course of his duties.
(e) During his employment the Executive shall not, except with the prior
written consent of the Board, be directly or indirectly engaged, concerned
or interested in any other business or occupation provided that he may hold
and/or be interested in (for the purpose of investment only and not
exceeding one per cent of the issued share capital of any company) any
securities listed on a recognised stock exchange or dealt in on any other
public securities market.
(f) There shall be no obligation on the Company to vest in or assign to the
Executive any powers or duties or to provide any work for him, and the
Company may at any time or from time to time during any period of notice as
specified in clause 2(a) (or in circumstances in which it reasonably
believes that the Executive is guilty of misconduct or in breach of this
Agreement, in order that the circumstances giving rise to that belief may
be investigated) suspend the Executive from the performance of his duties
or exclude him from any premises of the Company and need not give any
reason for so doing. During such suspension or exclusion the Company may
require the Executive to be available by telephone during normal working
hours. Salary and other benefits will not cease to be payable by reason
only of such suspension or exclusion.
<PAGE>
6. HOLIDAYS
(a) In addition to public holidays the Executive shall be entitled to [25]
working days' paid holiday in each calendar year which shall be taken at
such time or times as may be agreed between the Executive and the Board.
Holiday entitlement during each of the first and last calendar years of
employment shall be in direct proportion (to the nearest day) to the length
of the Executive's service during such year. The Executive shall have no
claim against the Company if he does not take his full holiday entitlement
and holiday not taken in one calendar year may not be carried forward in
whole or in part to a subsequent calendar year.
(b) Reasonable notice of proposed holiday dates must be given by the Executive
and the dates agreed with the Board. No holiday may be taken by the
Executive after notice to terminate the Executive's employment has been
given. On termination of his employment the Executive shall be entitled to
remuneration in lieu of any outstanding holiday entitlement and the Company
shall have the right to make an appropriate deduction from his final
remuneration in respect of any excess holiday taken by the Executive.
(c) The retirement age for the Executive shall be 65.
7. SECRECY
(a) The Executive shall not (except in the proper course of his duties
hereunder), either before or after the Termination Date, make use of or
divulge to any person, and shall use his best endeavours to prevent the
publication or disclosure of, any trade secret or any other private,
confidential or secret information concerning the business or finances of
the Group or any of its dealings, transactions or affairs or concerning any
third party with which the Group has dealt and all notes, memoranda and
other records of such trade secrets or information made or received by the
Executive during the course of his employment hereunder shall be the
property of the Company and shall be surrendered by him to someone duly
authorised on their behalf at the termination of his employment with the
Company or at the request of the Board at any time during the course of his
employment. In this Agreement confidential information includes, but is not
limited to, the following:-
<PAGE>
(i) information relating to the Group's clients, prospective clients,
persons to whom the Group has made presentations and for whom
quotations have been prepared, and the requirements of such persons
in terms of the Group's business or services;
(ii) information relating to the Group's suppliers, agents and
distributors;
(iii) information relating to intellectual property in which the Group has
an interest, the marketing of the Group's products and services and
the fee arrangements in force between the Group and its clients.
(b) Whenever requested to do so by the Company, and in any event upon
termination of his employment with the Company, the Executive shall hand
over to the Company all models, equipment, documents and records (including
all computer software and programs), and other things in his possession or
control which relate to the business or affairs of the Group or of any
third party with which the Group has had dealings and no copies shall be
retained by him. As between the Company and the Executive all such
documents and records are deemed to be the property of the Company.
(c) The restrictions in sub-clause (a) shall cease to apply to information or
knowledge which may (otherwise than through the Executive's fault) become
available to the public generally.
(d) These obligations are in addition to and not in substitution for any
obligations imposed upon the Executive by law or otherwise.
8. RESTRICTIONS
(a) The Executive shall not at any time during a period of six months after the
Termination Date and in material competition with any business carried on
by the Company or any other member of the Group at the Termination Date
solicit the custom of or deal with any person, firm or company which was a
client of or a prospective client of material importance to the Company or
any other member of the Group and with whom the Executive had communicated
or associated to any material extent in the course of his employment during
the twelve months preceding the Termination Date unless the Company ceases
to carry on inter-bank foreign business.
<PAGE>
(b) The Executive shall not at any time after the Termination Date represent
himself or cause or permit himself to be represented as being in any way
connected with the Group.
(c) The Executive shall be bound by the following restrictions in respect of
any employee of the Group who is an employee of the Company or any other
member of the Group at the Termination Date or at any time during the
preceding twelve months in an executive, managerial, technical or sales
capacity:-
(i) the Executive shall not at any time during a period of six months
from the Termination Date employ or offer to any such employee any
alternative employment or attempt in any way to persuade any such
employee to enter any alternative employment or to leave the
employment of the Group.
(ii) the Executive shall during a period of six months from the
Termination Date use his best endeavours to prevent any person, firm
or company with whom he may be engaged or connected from employing or
offering to any such employee any alternative employment or from
attempting in any way to persuade any such employee to enter into any
alternative employment or to leave the employment of the Group.
(d) The Executive acknowledges that in all the circumstances of this Agreement
(including, but not limited to, the remuneration payable to the Executive
hereunder) the restrictions and provisions herein contained are reasonable
and necessary for the protection of the Group's legitimate business
interests and he further acknowledges that, having regard to those
circumstances, such restrictions and provisions do not work harshly on him.
(e) Notwithstanding sub-clause (d), the parties agree that the covenants set
out in this clause shall be separate and severable and enforceable
accordingly and, if any of the above periods of six months following the
Termination Date referred to in sub-clauses (a), (b) and (c) shall be
adjudged to go beyond what is reasonable in all the circumstances for the
protection of the Group, a period or periods of three months following the
Termination Date shall be substituted therefor.
(f) The undertakings in this clause shall cover all actions by the Executive in
whatever capacity and whether directly or indirectly through or with any
third party, agent,
<PAGE>
company, partnership, employee, employer, associate (within the meaning of
section 435 of the Insolvency Act 1985) or trust which if done by him
personally would breach the provisions of this clause.
(g) These obligations are in addition to and not in substitution for any
obligations imposed upon the Executive by law or otherwise.
9. INJUNCTIVE RELIEF FOR SECRECY AND RESTRICTIONS
The Executive acknowledges that the Company will have no adequate remedy at
law if the Executive violates the terms of the provisions of either of
clauses 7 ("Secrecy") or 8 ("Restrictions") above. In the event of any such
violation, the Company shall have the right, in addition to and without
prejudice to any other rights it may have, to obtain in any court of
competent jurisdiction injunctive relief or specific performance to
restrain any breach or threatened breach of this Agreement.
10. DISCIPLINARY AND GRIEVANCE PROCEDURE
In the execution of his duties the Executive shall conduct himself in a
manner befitting his appointment hereunder. If the Executive is
dissatisfied with any disciplinary decision or wishes to seek redress for
any grievance relating to his employment he shall refer it to the Chairman
of the Board whose decision shall be final.
11. TERMINATION
(a) The Executive's employment may be terminated by the Company forthwith by
notice if:-
(i) he makes any arrangement or composition with his creditors generally
or there are grounds under section 267 of the Insolvency Act 1986 for
the presentation of a creditor's petition for a bankruptcy order to
be made against him or an interim receiver of his property is
appointed under section 286 of that Act;
(ii) he is convicted of a criminal offence as a result of which he is
sentenced to a term of imprisonment;
<PAGE>
(iii) he commits any serious breach of his obligations to the Company;
(iv) having committed any breach of his obligations to the Company he
fails to rectify such breach (if reasonably capable of
rectification) or commits a further or continuing breach after
warning by the Company;
(v) his conduct is in the opinion of the Board prejudicial to the
interests of the Group. The Board may take into account a
conviction for any criminal offence not covered by sub-clause (ii);
(vi) being a director of any company in the Group he resigns his
directorship or becomes prohibited by law from being a director;
(vii) he becomes of unsound mind or becomes a patient under the Mental
Health Act 1983;
(viii) by reason of ill health or incapacity he is prevented from
performing his duties for periods which have exceeded (or in the
reasonable estimation of the Board are likely to exceed) in
aggregate twenty-six weeks in any twelve month period.
(ix) he ceases to be authorised to conduct investment business in the
United Kingdom.
(b) Upon termination of his employment howsoever arising the Executive shall
resign without claim for compensation from all directorships and other
offices within the Group and should he fail to do so the Company is hereby
irrevocably authorised by the Executive to appoint some person in his name
and on his behalf as his attorney to sign any documents and do all things
necessary or requisite to give effect thereto.
(c) Upon the termination of the Executive's employment for whatever reason the
Company will be entitled to deduct from any payments then due or becoming
due to the Executive (whether in respect of any period before such
termination or not) any moneys which may then be or become due or may
become due thereafter from the Executive to the Company or any other member
of the Group.
<PAGE>
(d) If the Executive's employment shall be terminated by reason only of the
liquidation of the Company for the purpose of amalgamation or
reconstruction and the Executive shall be offered employment with any
concern or undertaking resulting from such amalgamation or reconstruction
on terms no less favourable than the terms of this Agreement the Executive
shall have no claim against the Company in respect of the termination of
his employment hereunder.
12. NOTICES
All notices under this Agreement shall be in writing. Notices to the
Company may be given by the Executive either personally to Charles Romilly
or by prepaid first class letter, facsimile or telex addressed to the
Company at its registered office for the time being. Notices to the
Executive may be given by the Company either personally or by prepaid first
class letter, facsimile or telex addressed to the Executive at his last
known address or his place of work. Any such notice unless given personally
shall be deemed, if given by letter, to have been served 48 hours from the
time of posting and in proving service by post it shall be sufficient to
show that the letter was properly addressed and posted in accordance with
the provisions of this clause and, if given by facsimile or telex, to have
been served at the time it is transmitted if transmitted between 9.00 am
and 5.30 pm London time on a business day or, if not so transmitted, at
9.00 am London time on the first business day thereafter. In proving
service by facsimile or telex it shall be sufficient to show that the
transmission was properly made and that the transmitting device was
connected to a device with a facsimile or telex telephone number reasonably
believed to be that of the party to be served.
13. PREVIOUS AGREEMENTS
(a) This Agreement supersedes any previous agreement (whether written, oral or
implied) between any member of the Group and the Executive relating to his
employment which, without prejudice to his right to receive sums accrued
due thereunder, shall be void from the Commencement Date.
(b) The Executive acknowledges and warrants that there are no agreements or
arrangements, whether oral, written or implied, between any member of the
Group and the Executive other than those expressly set out in this
Agreement and that he is not entering into this Agreement in reliance on
any representation not expressly set out herein.
<PAGE>
14. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English law and the Executive hereby irrevocably agrees for the exclusive
benefit of the Company that the English Courts are to have jurisdiction to
settle any disputes which may arise out of or in connection with this
Agreement.
EXECUTED (in the case of the Executive as a deed) on the date appearing at the
beginning of this document.
SIGNED by
the duly authorised representative of
THE COMPANY in the presence of:- /s/ Charles Romilly
Witness: Mrs. Helen Lucking /s/ Helen Lucking
14 Sandpiper Close
Colchester
CO43GE
SIGNED AND DELIVERED as a deed
by THE EXECUTIVE in the presence of:- /s/ Graham Wellesley
Witness: Mrs. Helen C. Lucking /s/ Helen Lucking
14 Sandpiper Close
Colchester
CO43GE
<PAGE>
Exhibit 10.55
DATED 12TH MARCH 1997
SERVICE AGREEMENT
BETWEEN
IFX LIMITED
AND
MR LORENZO NALDINI
M.W. CORNISH & CO
Solicitors
11 Old Jewry
London EC2R 8DU
<PAGE>
SERVICE AGREEMENT
Dated 12th March 1997
PARTIES
(1) IFX LIMITED whose registered office is at America House, 2 America Square,
London EC3N 2LU (the "Company"); and
(2) MR LORENZO NALDINI of Flat 2, 151 Sutherland Avenue, London W9 1EC (the
"Executive").
1. INTERPRETATION
In this Agreement:-
(a) the "Board" means the board of directors of the Company;
(b) the "Commencement Date" means the 12th day of March 1997;
(c) the "Group" means:
(i) the Company;
(ii) the Company's holding company (if any);
(iii) any other subsidiary of the Company or the Company's
holding company; and
(iv) any other company in which the Company is interested and whose name
is notified to the Executive by the Company as being a member of the
Group
and (where the context so admits) includes any member of the Group.
For this purpose "holding company" and "subsidiary" have the meanings given
to them by sections 736, 736A and 736B of the Companies Act 1985;
<PAGE>
(d) the "Termination Date" means the date on which the Executive's employment
under this Agreement ceases;
(e) reference to any statutory provision includes a reference to that provision
as amended, extended or re-enacted and to any statutory replacement thereof
(either before or after the date of this Agreement).
2. APPOINTMENT, TERM AND CONTINUITY
(a) Subject to the provisions of this Agreement, the Executive is appointed and
shall serve the Company as a Director from the Commencement Date until his
employment is terminated by either party giving to the other not less than
three months' notice expiring at any time.
(b) The Executive's period of continuous employment with the Company for the
purposes of the Employment Protection (Consolidation) Act 1978 commenced on
13th November 1995.
3. REMUNERATION
The Executive shall be entitled to salary of US$100,000 per annum, paid
monthly in arrears.
4. EXPENSES
The Company shall reimburse the Executive all reasonable out of pocket
expenses properly incurred by him on the Company's business and evidenced
to the Company's reasonable satisfaction provided that such expenses shall
not exceed such amounts as may be agreed from time to time unless approved
in advance.
5. DUTIES
(a) The Executive shall act as a broker in spot and forward foreign exchange in
the inter-bank market and as a introducer of clients to other Group
companies in relation to on-exchange futures and options broking and
clearing business. The Executive shall also perform such other duties and
exercise such powers as are consistent with his appointment and as are from
time to time given to him by the Board and shall use his best endeavours to
further the interests of the Group. The
<PAGE>
Executive shall comply with all policies and directives of the Board and
the rules of the Securities and Futures Authority Limited ("SFA") and in
particular personal account dealing and other regulatory notices and
requirements in compliance with the SFA rules.
(b) Without prejudice to sub-clause (a) the Executive shall at all times keep
the Board fully informed of his conduct of his duties on behalf of the
Company and, as the case may be, of any other member of the Group when
appropriate and shall promptly provide such information and explanations as
may be requested from time to time by the Board.
(c) The Executive's normal working hours shall be 8.30 a.m. to 6.30 p.m. on
Mondays to Fridays inclusive with one hour for lunch and he shall devote
such further time as may be necessary for the proper performance of his
duties. Pressure of work may well necessitate that longer hours are
worked.
(d) The Company may require the Executive to perform his duties anywhere within
or outside the United Kingdom in the ordinary course of his duties.
(e) During his employment the Executive shall not, except with the prior
written consent of the Board, be directly or indirectly engaged, concerned
or interested in any other business or occupation provided that he may hold
and/or be interested in (for the purpose of investment only and not
exceeding one per cent. of the issued share capital of any company) any
securities listed on a recognised stock exchange or dealt in on any other
public securities market.
(f) There shall be no obligation on the Company to vest in or assign to the
Executive any powers or duties or to provide any work for him, and the
Company may at any time or from time to time during any period of notice as
specified in clause 2(a) (or in circumstances in which it reasonably
believes that the Executive is guilty of misconduct or in breach of this
Agreement, in order that the circumstances giving rise to that belief may
be investigated) suspend the Executive from the performance of his duties
or exclude him from any premises of the Company and need not give any
reason for so doing. During such suspension or exclusion the Company may
require the Executive to be available by telephone during normal working
hours. Salary and other benefits will not cease to be payable by reason
only of such suspension or exclusion.
<PAGE>
6. HOLIDAYS
(a) In addition to public holidays the Executive shall be entitled to [25]
working days' paid holiday in each calendar year which shall be taken at
such time or times as may be agreed between the Executive and the Board.
Holiday entitlement during each of the first and last calendar years of
employment shall be in direct proportion (to the nearest day) to the length
of the Executive's service during such year. The Executive shall have no
claim against the Company if he does not take his full holiday entitlement
and holiday not taken in one calendar year may not be carried forward in
whole or in part to a subsequent calendar year.
(b) Reasonable notice of proposed holiday dates must be given by the Executive
and the dates agreed with the Board. No holiday may be taken by the
Executive after notice to terminate the Executive's employment has been
given. On termination of his employment the Executive shall be entitled to
remuneration in lieu of any outstanding holiday entitlement and the Company
shall have the right to make an appropriate deduction from his final
remuneration in respect of any excess holiday taken by the Executive.
(c) The retirement age for the Executive shall be 65.
7. SECRECY
(a) The Executive shall not (except in the proper course of his duties
hereunder), either before or after the Termination Date, make use of or
divulge to any person, and shall use his best endeavours to prevent the
publication or disclosure of, any trade secret or any other private,
confidential or secret information concerning the business or finances of
the Group or any of its dealings, transactions or affairs or concerning any
third party with which the Group has dealt and all notes, memoranda and
other records of such trade secrets or information made or received by the
Executive during the course of his employment hereunder shall be the
property of the Company and shall be surrendered by him to someone duly
authorised on their behalf at the termination of his employment with the
Company or at the request of the Board at any time during the course of his
employment. In this Agreement confidential information includes, but is
not limited to, the following:-
<PAGE>
(i) information relating to the Group's clients, prospective clients,
persons to whom the Group has made presentations and for whom
quotations have been prepared, and the requirements of such persons
in terms of the Group's business or services;
(ii) information relating to the Group's suppliers, agents and
distributors;
(iii) information relating to intellectual property in which the Group has
an interest, the marketing of the Group's products and services and
the fee arrangements in force between the Group and its clients.
(b) Whenever requested to do so by the Company, and in any event upon
termination of his employment with the Company, the Executive shall hand
over to the Company all models, equipment, documents and records (including
all computer software and programs), and other things in his possession or
control which relate to the business or affairs of the Group or of any
third party with which the Group has had dealings and no copies shall be
retained by him. As between the Company and the Executive all such
documents and records are deemed to be the property of the Company.
(c) The restrictions in sub-clause (a) shall cease to apply to information or
knowledge which may (otherwise than through the Executive's fault) become
available to the public generally.
(d) These obligations are in addition to and not in substitution for any
obligations imposed upon the Executive by law or otherwise.
8. RESTRICTIONS
(a) The Executive shall not at any time during a period of six months after the
Termination Date and in material competition with any business carried on
by the Company or any other member of the Group at the Termination Date
solicit the custom of or deal with any person, firm or company which was a
client of or a prospective client of material importance to the Company or
any other member of the Group and with whom the Executive had communicated
or associated to any material extent in the course of his employment during
the twelve months preceding the Termination Date unless the Company ceases
to carry on inter-bank foreign business.
<PAGE>
(b) The Executive shall not at any time after the Termination Date represent
himself or cause or permit himself to be represented as being in any way
connected with the Group.
(c) The Executive shall be bound by the following restrictions in respect of
any employee of the Group who is an employee of the Company or any other
member of the Group at the Termination Date or at any time during the
preceding twelve months in an executive, managerial, technical or sales
capacity:-
(i) the Executive shall not at any time during a period of six months from
the Termination Date employ or offer to any such employee any
alternative employment or attempt in any way to persuade any such
employee to enter any alternative employment or to leave the
employment of the Group.
(ii) the Executive shall during a period of six months from the Termination
Date use his best endeavours to prevent any person, firm or company
with whom he may be engaged or connected from employing or offering to
any such employee any alternative employment or from attempting in any
way to persuade any such employee to enter into any alternative
employment or to leave the employment of the Group.
(d) The Executive acknowledges that in all the circumstances of this Agreement
(including, but not limited to, the remuneration payable to the Executive
hereunder) the restrictions and provisions herein contained are reasonable
and necessary for the protection of the Group's legitimate business
interests and he further acknowledges that, having regard to those
circumstances, such restrictions and provisions do not work harshly on him.
(e) Notwithstanding sub-clause (d), the parties agree that the covenants set
out in this clause shall be separate and severable and enforceable
accordingly and, if any of the above periods of six months following the
Termination Date referred to in sub-clauses (a), (b) and (c) shall be
adjudged to go beyond what is reasonable in all the circumstances for the
protection of the Group, a period or periods of three months following the
Termination Date shall be substituted therefor.
(f) The undertakings in this clause shall cover all actions by the Executive in
whatever capacity and whether directly or indirectly through or with any
third party, agent,
<PAGE>
company, partnership, employee, employer, associate (within the meaning of
section 435 of the Insolvency Act 1985) or trust which if done by him
personally would breach the provisions of this clause.
(g) These obligations are in addition to and not in substitution for any
obligations imposed upon the Executive by law or otherwise.
9. INJUNCTIVE RELIEF FOR SECRECY AND RESTRICTIONS
The Executive acknowledges that the Company will have no adequate remedy at
law if the Executive violates the terms of the provisions of either of
clauses 7 ("Secrecy") or 8 ("Restrictions") above. In the event of any such
violation, the Company shall have the right, in addition to and without
prejudice to any other rights it may have, to obtain in any court of
competent jurisdiction injunctive relief or specific performance to
restrain any breach or threatened breach of this Agreement.
10. DISCIPLINARY AND GRIEVANCE PROCEDURE
In the execution of his duties the Executive shall conduct himself in a
manner befitting his appointment hereunder. If the Executive is
dissatisfied with any disciplinary decision or wishes to seek redress for
any grievance relating to his employment he shall refer it to the Chairman
of the Board whose decision shall be final.
11. TERMINATION
(a) The Executive's employment may be terminated by the Company forthwith by
notice if:-
(i) he makes any arrangement or composition with his creditors generally
or there are grounds under section 267 of the Insolvency Act 1986 for
the presentation of a creditor's petition for a bankruptcy order to
be made against him or an interim receiver of his property is
appointed under section 286 of that Act;
(ii) he is convicted of a criminal offence as a result of which he is
sentenced to a term of imprisonment;
<PAGE>
(iii) he commits any serious breach of his obligations to the Company;
(iv) having committed any breach of his obligations to the Company he
fails to rectify such breach (if reasonably capable of
rectification) or commits a further or continuing breach after
warning by the Company;
(v) his conduct is in the opinion of the Board prejudicial to the
interests of the Group. The Board may take into account a
conviction for any criminal offence not covered by sub-clause (ii);
(vi) being a director of any company in the Group he resigns his
directorship or becomes prohibited by law from being a director;
(vii) he becomes of unsound mind or becomes a patient under the Mental
Health Act 1983;
(viii) by reason of ill health or incapacity he is prevented from
performing his duties for periods which have exceeded (or in the
reasonable estimation of the Board are likely to exceed) in
aggregate twenty-six weeks in any twelve month period.
(ix) he ceases to be authorised to conduct investment business in the
United Kingdom.
(b) Upon termination of his employment howsoever arising the Executive shall
resign without claim for compensation from all directorships and other
offices within the Group and should he fail to do so the Company is hereby
irrevocably authorised by the Executive to appoint some person in his name
and on his behalf as his attorney to sign any documents and do all things
necessary or requisite to give effect thereto.
(c) Upon the termination of the Executive's employment for whatever reason the
Company will be entitled to deduct from any payments then due or becoming
due to the Executive (whether in respect of any period before such
termination or not) any moneys which may then be or become due or may
become due thereafter from the Executive to the Company or any other member
of the Group.
<PAGE>
(d) If the Executive's employment shall be terminated by reason only of the
liquidation of the Company for the purpose of amalgamation or
reconstruction and the Executive shall be offered employment with any
concern or undertaking resulting from such amalgamation or reconstruction
on terms no less favourable than the terms of this Agreement the Executive
shall have no claim against the Company in respect of the termination of
his employment hereunder.
12. NOTICES
All notices under this Agreement shall be in writing. Notices to the
Company may be given by the Executive either personally to Charles Romilly
or by prepaid first class letter, facsimile or telex addressed to the
Company at its registered office for the time being. Notices to the
Executive may be given by the Company either personally or by prepaid first
class letter, facsimile or telex addressed to the Executive at his last
known address or his place of work. Any such notice unless given personally
shall be deemed, if given by letter, to have been served 48 hours from the
time of posting and in proving service by post it shall be sufficient to
show that the letter was properly addressed and posted in accordance with
the provisions of this clause and, if given by facsimile or telex, to have
been served at the time it is transmitted if transmitted between 9.00 am
and 5.30 pm London time on a business day or, if not so transmitted, at
9.00 am London time on the first business day thereafter. In proving
service by facsimile or telex it shall be sufficient to show that the
transmission was properly made and that the transmitting device was
connected to a device with a facsimile or telex telephone number reasonably
believed to be that of the party to be served.
13. PREVIOUS AGREEMENTS
(a) This Agreement supersedes any previous agreement (whether written, oral or
implied) between any member of the Group and the Executive relating to his
employment which, without prejudice to his right to receive sums accrued
due thereunder, shall be void from the Commencement Date.
(b) The Executive acknowledges and warrants that there are no agreements or
arrangements, whether oral, written or implied, between any member of the
Group and the Executive other than those expressly set out in this
Agreement and that he is not entering into this Agreement in reliance on
any representation not expressly set out herein.
<PAGE>
14. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English law and the Executive hereby irrevocably agrees for the exclusive
benefit of the Company that the English Courts are to have jurisdiction to
settle any disputes which may arise out of or in connection with this
Agreement.
EXECUTED (in the case of the Executive as a deed) on the date appearing at the
beginning of this document.
SIGNED by
the duly authorised representative of
THE COMPANY in the presence of:- /s/ Charles Romilly
Witness: Mrs. Helen Lucking /s/ Helen Lucking
14 Sandpiper Close
Colchester
CO43GE
SIGNED AND DELIVERED as a deed
by THE EXECUTIVE in the presence of:- /s/ Lorenzo Naldini
Witness: Mrs. Helen Lucking /s/ Helen Lucking
14 Sandpiper Close
Colchester
CO43GE
<PAGE>
Exhibit 10.56
Flat 2
151 Sutherland Avenue
London W9 1EC
22nd April 1997
Charles Romilly Esq.
Director
IFX Ltd.
America House
2 America Square
London EC3N 2LU
Dear Charles
I acknowledge and agree, in accordance with the Memorandum Agreement dated 12th
March 1997, that the payment to me, or my designee, of the sum of $162,683.50,
less PAYE tax and the Employer's National Insurance Contribution, and any
advances which have already been made to me, will be in full and final
settlement of all liabilities you may have to me under the Heads of Agreement,
dated 19th July 1997 and the Terms of Employment, dated 13th November 1995, both
of which are now terminated.
Yours sincerely
/s/ Lorenzo Naldini
Lorenzo Naldini
<PAGE>
Exhibit 10.57
38 Santos Road
London
SW18 INS
22nd April 1997
Charles Romilly Esq.
Director
IFX Ltd.
America House
2 America Square
London EC3N 2LU
Dear Charles
I acknowledge and agree, in accordance with the Memorandum Agreement dated 12th
March 1997, that the payment to me, or my designee, of the sum of $162,683.50,
less PAYE tax and the Employer's National Insurance Contribution, and any
advances which have already been made to me, will be in full and final
settlement of all liabilities you may have to me under the Heads of Agreement,
dated 19th July 1997 and the Terms of Employment, dated 13th November 1995, both
of which are now terminated.
Yours sincerely
/s/ Graham Wellesley
Graham Wellesley
<PAGE>
Exhibit 11.1
JACK CARL/312-FUTURES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
---------------------- ---------------------------
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
EARNINGS (LOSS)
Net income (loss) $ 272,800 $ 1,009,200 $ (89,500) $ 1,621,800
Deduct assumed
dividends on Class A
preferred stock (10,000) (3,300) (30,000) (23,300)
----------- ----------- ----------- -----------
Net income (loss)
applicable to
common stock $ 262,800 $ 1,005,900 $ (119,500) $ 1,598,500
=========== =========== =========== ===========
SHARES
Weighted average
number of common
shares outstanding 33,667,632 33,481,254 33,717,323 33,577,469
=========== =========== =========== ===========
Primary earnings (loss)
per common share:
Net income (loss) $ .01 $ .03 $ (.00) $ .05
=========== =========== =========== ===========
</TABLE>
Note: Fully diluted earnings per share have not been presented because the
effects are not material.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> MAR-31-1997
<CASH> 6,867,900
<SECURITIES> 110,691,200
<RECEIVABLES> 10,381,800
<ALLOWANCES> (455,700)
<INVENTORY> 0
<CURRENT-ASSETS> 127,940,900
<PP&E> 2,563,000
<DEPRECIATION> (2,297,000)
<TOTAL-ASSETS> 128,610,100
<CURRENT-LIABILITIES> 121,766,800
<BONDS> 0
0
0
<COMMON> 131,800
<OTHER-SE> 6,711,500
<TOTAL-LIABILITY-AND-EQUITY> 128,610,100
<SALES> 161,500
<TOTAL-REVENUES> 10,102,800
<CGS> 0
<TOTAL-COSTS> 254,800
<OTHER-EXPENSES> 5,329,800
<LOSS-PROVISION> 46,400
<INTEREST-EXPENSE> 2,025,800
<INCOME-PRETAX> 2,446,000
<INCOME-TAX> 824,200
<INCOME-CONTINUING> 1,621,800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,621,800
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
