JB OXFORD HOLDINGS, INC.
9665 Wilshire Boulevard, Third Floor
Beverly Hills, California 90212
______________
INFORMATION STATEMENT PURSUANT TO SECTION 14(f)
OF THE SECURITIES EXCHANGE ACT OF 1934
NOTICE OF CHANGE IN THE MAJORITY OF DIRECTORS
June 1, 1998
_____________
This Information Statement is being mailed on or about June
2, 1998 to the holders of record of the Common Stock, $.01 par
value per share, of JB Oxford Holdings, Inc., a Utah corporation
(the "Company") as of the close of business on May 29, 1998. This
Information Statement is being furnished in connection with
certain aspects of an agreement (the "Purchase Agreement") entered
as of May 21, 1998, by and among the Company, Third Capital
Partners, LLC, ("Third Capital"); 3421643 Canada Inc. (the "Bier
Group"); Felix A. Oeri, the Company's Chairman; and Oeri Finance
Inc. ("Oeri Finance"), a company controlled by Mr. Oeri. As a
result of the Purchase Agreement, which is expected to be
completed in early June 1998, five major events have and/or will
occur:
1. Third Capital and the Bier Group (together, the
"Investment Group"), have purchased approximately $3.9
million in outstanding principal amount of the Company's 9%
Senior Secured Convertible Notes (the "Convertible Notes")
from Oeri Finance, with the Company agreeing to reduce the
conversion ratio from $1.00 to $0.70 per common share and the
Investment Group agreeing to extend the maturity date of the
Convertible Notes to December 31, 1999.
2. The Investment Group will purchase from the Company
$2 million in newly issued convertible debentures (the "New
Notes") having substantially the same terms as the
Convertible Notes, modified as described above, except that
the New Notes will be subordinate to certain other
outstanding notes of the Company, and that the New Notes
shall be converted into a new issue of preferred stock of the
Company if such new issue is approved by the Company's
shareholders at a meeting to be held later in 1998. The
preferred stock shall be convertible into common stock on the
same terms as the Convertible Note and the New Notes.
3. Felix Oeri and Oeri Finance have granted to
Christopher L. Jarratt, the Chief Executive Officer of Third
Capital, the right to vote all common stock of the Company
beneficially owned by him and it (approximately 2.4 million
shares, or approximately 17% of the Company's outstanding
common stock) and shall grant the Investment Group a right of
first refusal to purchase such stock and any other stock,
options, or warrants of the Company now or hereafter owned by
Oeri and Oeri Finance.
4. The Investment Group, following completion of the
transactions contemplated by the Purchase Agreement, is
obligated to undertake to obtain for the Company at least $7
million in new equity capital as soon as practicable, on
terms to be negotiated.
5. The Company's Board of Directors has elected four
representatives of the Investment Group B Christopher L.
Jarratt, James G. Lewis, Elliott L. Bier, and Mark D. Grossi
B to the Company's Board of Directors. The Company has
obtained resignations from each of the Company's current
directors, effective June 8, 1998, so that the Investment
Group will have complete control of the Company's Board of
Directors after that date. The issuance of the New Notes is
expected to occur on or before June 8, 1998. Mr. Jarratt has
been elected Chairman and Chief Executive Officer of the
Company, replacing Mr. Oeri as Chairman and Stephen M.
Rubenstein as Chief Executive Officer. Mr. Lewis has been
elected interim President and Chief Operating Officer of the
Company. Mr. Rubenstein will remain as President of the
Company's principal subsidiary, JB Oxford & Company,
reporting to Mr. Lewis.
Because of the change in a majority of the Board of Directors
(in this case all of the Directors), this Information Statement is
required to be filed with the Securities and Exchange Commission
and sent to all shareholders of record of the Company by Section
14(f) of the Securities Exchange Act of 1934 and Rule 14f-1
thereunder.
Your Board of Directors has spent considerable time over the
past nine months exploring alternatives to increase the capital of
the Company and to increase customer and investor confidence in
the Company. The Board believes that the transactions
contemplated by the Purchase Agreement present the best available
opportunity to meet these objectives and enhance the future
prospects of the Company, and, as such are in the best interests
of the Company and its shareholders.
Information contained herein concerning the new directors
appointed to the Board of Directors has been furnished by those
persons, and the Company assumes no responsibility for the
accuracy or completeness of such information.
You are urged to read this Information Statement carefully.
You are not, however, required to take any action. NO PROXIES ARE
BEING SOLICITED BY THIS NOTICE.
OUTSTANDING SHARES AND VOTING RIGHTS
As of May 29, 1998, the Company had outstanding 14,141,205
shares of Common Stock. Each share entitles the holder to one
vote. The holders of Common Stock do not have cumulative voting
rights, which means the holders of more than half of the shares
can elect all of the directors, and the holders of the remaining
shares may not be able to elect any directors.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth those individuals who
beneficially owned more than five percent of the Company's Common
Stock as of May 25, 1998 (prior to completion of the transaction
contemplated by the Purchase Agreement). In addition, the number
of shares of the Company's Common Stock beneficially owned by each
director and officer, and the number of shares beneficially owned
by the directors and executive officers of the Company as a group,
as of May 25, 1998 are disclosed below in the same table. The
information was furnished to the Company by the identified
individuals and by the Company's Transfer Agent.
Amount and Percent of
Nature of Common
Beneficial Shares
NAME Ownership(1) Outstanding
Beneficial Owners of More Than 5%
Oeri Finance Inc. 2,557,199(2) 16.9%
Peter Merian-Strasse 50
CH-4002 Basel, Switzerland
Felix A. Oeri 3,421,865(3) 22.6%
Peter Merian-Strasse 50
CH-4002 Basel, Switzerland
Directors (other than Mr. Oeri)
Stephen Rubenstein 360,561(4) 2.5%
Mitchell S.T. Wine 220,000(5) 1.6%
John Broome 60,000(6) -- (7)
Executive Officers
Michael J. Chiodo 5,771(8) -- (7)
Scott G. Monson 26,119(9) -- (7)
All Directors & Executive
Officers as a Group 4,094,316 26.2%
(1) All shares are common class.
(2) Includes 1,001,446 shares which may be acquired
pursuant to the terms of the Senior Secured Convertible
Note.
(3) Includes the amount and nature of beneficial ownership
held by Oeri Finance, Inc., a company of which Mr. Oeri
is a principal shareholder.
(4) Includes 350,000 shares which may be acquired upon
exercise of options, and 561 shares pursuant to the
Company Employee Stock Ownership Plan, which are 60%
vested.
(5) Includes 60,000 shares which may be acquired upon
exercise of options.
(6) Includes 60,000 shares which may be acquired
upon exercise of options.
(7) Less then 1%.
(8) Includes 5,771 shares pursuant to the Company Employee
Stock Ownership Plan, which are 100% vested.
(9) Includes 4,169 shares pursuant to the Company Employee
Stock Ownership Plan, which are 100% vested.
Following completion of the transactions contemplated by the
Purchase Agreement, the Investment Group will own the Convertible
Notes and the New Notes which will be convertible into 5,598,137
shares and 2,857,143 shares, respectively, of the Company's Common
Stock. Assuming conversion, these holdings will represent
approximately 37.4% of the Company's outstanding Common Stock.
Additionally, Christopher L. Jarratt beneficially owns 87,500
shares of Common Stock of the Company and James G. Lewis owns
42,800 shares of Common Stock of the Company, each individual
holding representing less than 1% of the Company's outstanding
Common Stock. Further, Mr. Jarratt will hold a proxy to vote
2,420,419 shares of the Company's Common Stock owned by Felix A.
Oeri and/or Oeri Finance, representing an additional 10.7% of the
Company's outstanding Common Stock
Directors and Executive Officers of the Company
The Company's Board of Directors prior to the transactions
contemplated by the Purchase Agreement consisted of four members.
The Board is authorized to set the number of Directors in a range
of three to nine. As part of the transactions contemplated by
the Purchase Agreement, the Board increased the authorized number
of Directors to eight, appointed Christopher L. Jarratt, James G.
Lewis, Mark D. Grossi and Elliot L. Bier to fill the four
vacancies. Simultaneously with the purchase of the Convertible
Notes from Oeri, the four prior members of the Board submitted
letters of resignation, effective June 8, 1998. The issuance of
the New Notes is expected to occur on or before June 8, 1998. On
June 8, 1998, all of the Company's Directors will be
representatives of the Investment Group, and the number of
authorized Directors will be reduced to four.
Listed below are the Directors and executive officers of the
Company prior to the transactions contemplated by the Purchase
Agreement followed by their business experience:
Business Experience
FELIX OERI
Chairman of the Board of the Company. Chairman and CEO of Oeri
Finance Inc., a Swiss financial institution and trust company,
providing broker/dealer services for securities, foreign exchange
and precious metals, July 1987 to present. From 1979 to 1987,
Mr. Oeri served as Chairman and CEO of Bank Fuer Privates
Eigentum BPE, Basel. Mr. Oeri served as a member of the Grosser
Rat des Kantons Basel-Stadt (Parliament) and its Finance
Committee from 1981 to 1991.
STEPHEN M. RUBENSTEIN
Director, President and CEO of Registrant and JBOC, August 1994
to present. Chief Administrative Officer of RKSI and JBOC, March
1994 to August 1994. Financial Consultant specializing in
services to financial industry participants and attorneys, June
1992 - March 1994. Managing Director, Price Waterhouse,
Financial Services Industry Group, December 1990 - June 1992.
Chief Operations Officer and Chief Financial Officer and
Treasurer, Cantor Fitzgerald & Co., 1985 - 1990. Mr. Rubenstein
holds a Bachelor of Science degree in Accounting from Bernard
Baruch College, NYC, 1968 and is currently affiliated with AICPA,
California Society of CPA's, SIA and Association of Western
Securities Management.
MITCHELL S.T. WINE
Director and Secretary of the Company. Vice President of WSP
Marketing International Ltd., a sales promotion and marketing
firm, Toronto, Ontario, 1990-present. Received Masters in
Business & Administration from Columbia University, New York, NY
1989. Admitted to California State Bar in 1985. Admitted to
Providence of Ontario Bar, 1982. Practiced law with McCarthy
Tetrault in Toronto, Ontario, 1982-1988. Mr. Wine received a law
degree (LL.B) from University of Toronto, Toronto, Ontario:
Awarded Dean's key on graduation, 1982. Received Bachelor of
Arts degree Cum Laude from Queen's University in Kingston,
Ontario, 1979.
JOHN BROOME
Director of the Company. Mr. Broome is a retired Chartered
Accountant (the Canadian equivalent of a U.S. Certified Public
Accountant). Mr. Broome was formerly the Managing Partner of
KPMG, Montreal office, 1974 - 1988. Among his professional
assignments was assisting in taking Air Canada public, in 1900.
Mr. Broome is currently active as a Director in several private
and public companies, including Delhi Industries, Toronto; CompAs
Electronics, Ottawa; and Trustee, Franklands Foundation,
Montreal; his duties include chairing the Audit Committees of
many of these Boards. Mr. Broome received a degree in Commerce
from McGill University in Montreal, 1954; became a Chartered
Accountant in 1958, and received an honorary designation as
Fellow Chartered Accountant in 1989.
MICHAEL J. CHIODO
Chief Financial Officer and Treasurer, JB Oxford Holdings, Inc.,
September 1997 to present. Acting Chief Financial Officer, JB
Oxford Holdings, Inc., August 1994 to September 1997. Chief
Financial Officer, JB Oxford & Company, January 1994 to present.
Mr. Chiodo was previously employed by Reynolds Kendrick
Stratton, Inc. from August 1990 to December 1993, where he was
named the Chief Financial Officer in October 1992. He is a
former partner of the accounting firm of Sorensen, Chiodo & May.
Mr. Chiodo received a Bachelor of Science degree in Accounting
from Westminster College in Salt Lake City, Utah in 1978. Mr.
Chiodo is a Certified Public Accountant and is affiliated with
AICPA.
SCOTT G. MONSON
General Counsel, JB Oxford Holdings, Inc. and its subsidiaries,
September 1997 to present. Associate General Counsel, JB Oxford
Holdings, Inc. and subsidiaries, August 1994 to September 1997.
Legal Counsel, JB Oxford Holdings, Inc. and subsidiaries, March
1989 - August 1994. Admitted to: California State Bar, 1997;
Texas State Bar, 1995; District of Columbia Bar, 1993; Utah
State Bar, 1985. Mr. Monson received a Juris Doctor degree from
the University of Utah College of Law in Salt Lake City, Utah in
1985, and received a Bachelor of Science degree in Psychology
from Brigham Young University in Provo, Utah in 1982.
Information concerning the representatives of the investment
Group to be elected as Directors of the Company, each of whom is
a United States citizen except for Mr. Bier, who is a Canadian
citizen, is as follows:
CHRISTOPHER L. JARRATT
Since September 1996, Mr. Jarratt has been the Chief Executive
Officer of Third Capital, LLC, a company engaged in various
investing and advisory activities. Mr. Jarratt serves as a
director for Pacific Gateway Properties, Inc., a publicly traded
real estate company, and as a director for TIS Mortgage
Investment Company, a publicly traded REIT. Since prior to 1993,
Mr. Jarratt has served a s Chief Executive Officer of Jarratt
Associates, Inc., a company engaged in commercial mortgage
banking and commercial real estate investment activities. Mr.
Jarratt has a Bachelor of Business Administration degree from
Southern Methodist University, Dallas, Texas. Mr. Jarratt is 36
years old.
JAMES G. LEWIS
Since September 1996, Mr. Lewis has been the Chief Operating
Officer of Third Capital, LLC, a company engaged in various
investment and advisory activities. Mr. Lewis serves as a
director for TIS Mortgage Investment Company, a publicly traded
REIT. From May, 1994 though August, 1996, Mr. Lewis was employed
as an attorney with the law firm Shumaker, Loop & Kendrick,
Tampa, Florida, where he specialized in mergers & acquisitions,
corporate and securities law. From September, 1990 until May,
1994, Mr. Lewis was employed as an attorney with the law firm of
Johnson, Blakely, Pope, Bokor, Ruppel & Burns, P.A., Clearwater,
Florida, where he specialized in mergers & acquisitions,
corporate and securities law. Mr. Lewis holds a Juris Doctorate
degree from Vanderbilt University and a Bachelor of Science
degree in Accounting from Spring Hill College. Mr. Lewis is 32
years old.
MARK D. GROSSI
Mr. Grossi is currently Executive vice President and director of
Charter One Financial, Inc., a publicly traded savings and loan
holding company, and Executive Vice President and Chief Retail
Banking Officer of its subsidiary, Charter One Bank. Mr. Grossi
also serves as a director of Pacific Gateway Properties, Inc., a
publicly traded real estate company. Since prior to 1993, Mr.
Grossi has held various senior executive positions with Charter
One bank and its predecessor. Mr. Grossi is 43 years old.
ELLIOT L. BIER
Elliot L. Bier is currently a senior managing partner of Adessky
Poulin, a 40-year old law firm located in the City of Montreal,
Providence of Quebec. Mr. Bier has been a member of Adessky
Poulin for 21 years, specializing in corporate law and mergers
and acquisitions. He possesses a Bachelor of Arts degree, a
Masters of Business Administration degree (M.B.A.), as well as a
Bachelor of Civil Law degree (B.C.L.) and a Bachelor of Common
Law degree (LL.B.) from McGill University. Mr. Bier serves as a
director on the Board of Grand Toys International, is President
of Mount Sinai Hospital, located in the City of Montreal,
Providence of Quebec, and serves as a director in numerous
charitable foundations and organizations. Mr. Bier is 48 years
old.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act requires the
Company's directors, executive officers, and persons who own more
than ten percent of a registered class of the Company's equity
securities, to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission.
Based on copies of such reports furnished to the Company, there
were no reportable untimely filings under Forms 3,4, or 5 by
persons subject to Section 16(a) of the Securities Exchange Act
of 1934 during the last fiscal year, except Mr. Broome filed a
late Form 4 covering the grant of 5,000 options and Mr. Wine
filed a late Form 4 covering the grant of 5,000 options.
Executive Compensation
The following Summary Compensation Table sets forth the
annual compensation for those serving as executive officers and
directors as of December 31, 1997 and compensated by the Company
or any of its subsidiaries for each of the last three completed
fiscal years.
Long Term
Compensation
Name and Annual Compensation Options Granted
Principal Position Salary Bonus Other (Shares)
Stephen Rubenstein 1997 $287,500 $25,000 $456 100,000
Director, CEO 1996 253,605 100,000 456 50,000
1995 213,956 -- -- 100,000
Michael J. Chiodo 1997 110,000 5,000 76 --
CFO, Treasurer 1996 100,000 15,000 50 --
1995 102,575 26,000 -- --
Scott G. Monson 1997 100,000 5,000 -- --
General Counsel, 1996 90,000 9,000 -- --
Asst. Secretary 1995 $89,750 $7,500 -- --
This table excludes the value of certain incidental personal
benefits. The incremental cost to the Company of providing such
incidental personal benefits did not, for the current year,
exceed the lesser of $50,000 or 10% of annual salary and bonus
for any of the respective individuals named in the table as set
forth. Outside directors are compensated $2,500 for each
quarterly meeting attended. The chairman of the compensation
committee and audit committee receives an additional $5,000 and
$7,500 a year respectively for his duties. Mr. Broome has served
as the Chairman of both the compensation committee and the audit
committee. Employee directors are not compensated for meeting
attendance.
Mr. Rubenstein serves pursuant to an employment agreement
that extends until March 31, 2000. The agreement provides that
he will be President and Chief Executive Officer of the Company
with a salary of $300,000 beginning April 1, 1997, $325,000 the
following year and $350,000 the year after that. In 1997, in
connection with the execution of the agreement, Mr. Rubenstein
received a bonus of $25,000 and the forgiveness of a loan of
$50,000. The agreement can then be renegotiated, terminated or
continued on a month-to-month basis. Mr. Rubenstein was granted
options to purchase 100,000 shares of the Company's common stock,
as described elsewhere herein, pursuant to the agreement. Mr.
Rubenstein receives life and disability insurance, as well as
standard benefits received by all officers. In the event that
Mr. Rubenstein is terminated without cause, he is entitled to the
full payment of all compensation called for by the agreement.
Mr. Monson executed an employment agreement with the Company
in June 1994, which presently continues on a month-to-month
basis. The only significant obligation of the Company remaining,
other than Mr. Monson's salary described above, is his right to
four months written notice of termination and three months
severance pay upon termination.
JB Oxford Holdings, Inc.
Option Grants in the Last Fiscal Year
12-31-97
The following table summarizes individual grants of stock options made
during the current year to each of the named executive officers.
Grant Date First
(a) Date (b) (c) (d) Exercisable (e) (f) (g)
Stephen 4-1-97 20,000 1.59 4-1-97 4-1-07 20,024 50,827
Rubenstein 4-1-97 10,000 1.59 7-1-97 7-1-07 9,707 24,497
4-1-97 10,000 1.59 10-1-97 10-1-07 10,336 26,444
4-1-97 10,000 1.59 1-1-98 1-1-08 10,972 28,436
4-1-97 10,000 1.59 4-1-98 4-1-08 11,307 29,545
4-1-97 10,000 1.59 7-1-98 7-1-08 11,643 30,653
4-1-97 10,000 1.59 10-1-98 10-1-08 11,979 37,762
4-1-97 10,000 1.59 1-1-99 1-1-09 12,315 32,870
4-1-97 10,000 1.59 4-1-99 4-1-09 12,667 34,089
Total 100,000 49%
(a) Name of the executive officer.
(b) The number of securities underlying the options granted.
(c) For the Options granted, its % of total options granted to employees in
the current year
(d) Excercise price per share.
(e) Expiration date.
(f) Potential realized value at assumed annual rates of stock price
appreciation of 5% compounded for the option term.
(g) Potential realized value at assumed annual rates of stock price
appreciation of 10% compounded for the option term.
JB Oxford Holdings, Inc.
Aggregated Option/SAR Exercises in Last Fiscal Year & FY-end Option/SAR Values
12-31-97
The following table summarizes any options exercised during the current year
by each of the named executive officers, and the year-end value of
unexercised options on an aggregate basis.
(a) (b) (c) (d) (e)
Shares Value Value of
Acquired Realized Shares Unexercised (#) Unexercised ($)
On Exercise On Exercise Exercisable/Unexercisable Ex./Unex.
Stephen -- -- 200,000 -- 59,000 --
Rubenstein -- -- 25,000 -- -- --
-- -- 25,000 -- -- --
(a) Name of the executive officer.
(b) The number of shares received upon exercise of the option.
(c) The aggregate dollar value realized upon exercise of the option.
(d) The total number of securities underlying unexercised options and
SAR's held at the end of the last completed fiscal year, separately
identifying the exercisable and unexercisable options and SAR's.
(e) The aggregate dollar value of in-the-money, unexercised options and
SAR's held at the end of the fiscal year, separately identifying the
exercisable and unexercised options and SAR's.
Certain Information Regarding the Board of Directors and Committees Thereof
During the fiscal year ended December 31, 1997, the Board of
Directors held three regular meetings. All directors attended 100% of
all meetings of the Board and of each Committee of the Board of which
the director was a member.
The Company has standing executive, audit and compensation
Committees. The members of each Committee are elected by the Board of
Directors at its annual organizational meeting for a term of one year
oruntil the Director's successor is duly elected.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee, as of May 25, 1998, was comprised
of the following Directors who were elected to the committee on
September 19, 1997. Both members were re-elected, having served the
prior year.
John Broome, Chair
Mitchell S.T. Wine
Mitchell S.T. Wine also serves as the Secretary of the Company,
in addition to his responsibilities on the Compensation Committee.
None of the members of the Compensation Committee had any
relationship requiring disclosure under any paragraph of Item 404 of
Regulation S-K.
Compensation Committee Report on Executive Compensation
The Compensation Committee, consisting solely of non-employee
directors, administers the executive compensation programs of the
Company and determines the compensation of senior management. Part of
this compensation, as described above, is paid pursuant to employment
agreements with Messrs. Rubenstein and Monson. Beyond this, in
determining compensation for senior management, the Committee seeks to
evaluate the officer's performance during the year, taking into
consideration the Company's performance, the officer's level of
responsibility for such performance the officer's experience, market or
other conditions outside the officer's control that may have affected
performance, achievement of any specified goals or objectives relating
to the officer's position, and other factors. Based on its evaluation,
the Committee may recommend increases or decreases in standard senior
management compensation, the award of bonus compensation, the grant of
stock options, or other incentives in appropriate circumstances.
Performance Graph
The Company's common shares are traded on the National Association
of Securities Dealers Automated Quotations (_NASDAQ_) under the trading
symbol JBOH. The Performance Graph and table below shows changes over
the past five years in the value of $100 invested in (1) JB Oxford
Holding, Inc.'s Common Stock, and (2) the NASDAQ Financial Industry
Index. The performance of the index and the Company's Common Stock
assumes the reinvestment of all dividends.
Performance Table
Closing Index
JBOH Price NASDAQ compared
Date closing compared Index to base
price to base year
year
Base Year 12/31/92 $4.500 $100 213.884 100
12/31/93 1.125 25 248.587 116
12/31/94 1.000 22 249.168 116
12/31/95 2.813 63 363.023 170
12/31/96 1.375 31 465.167 217
12/31/97 $0.844 $19 710.669 332
EXPENSES OF MAILING
The Company will bear the cost of the mailing of this Information
Statement.
By Order of the Board of Directors
Scott G. Monson
Assistant Secretary
and General Counsel
June 1, 1998
