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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
SCHEDULE 13D
Information to be included in statements filed pursuant to Rule 13d-1(a)
and amendments thereto filed pursuant to Rule 13d-2(a)
Under the Securities Exchange Act of 1934
(Amendment No. 2 )*
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JB Oxford Holdings, Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
46610710
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(CUSIP Number)
Marc C. Krantz, Kohrman Jackson & Krantz P.L.L., 1375 East 9th Street,
Cleveland, Ohio 44114, 216-736-7204
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
September 10, 1999
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box / /.
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. SEE Rule 13d-7(b) for
other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, SEE
the Notes).
Page 1 of 6
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SCHEDULE 13D
CUSIP NO. 46610710 PAGE 2 OF 6 PAGES
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Third Capital Partners, LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [__]
(b) [__]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [__]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Tennessee
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NUMBER OF 7 SOLE VOTING POWER
SHARES 8,310,532 (1)
-----------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
-----------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 7,840,992
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PERSON 10 SHARED DISPOSITIVE POWER
WITH -0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,310,532 (1)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [__]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
37.6%
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14 TYPE OF REPORTING PERSON*
OO
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(1) Includes 469,540 shares held by the JB Oxford Revocable Government Trust of
which Third Capital Partners, LLC is the Trustee with the power to vote the
469,540 shares held by the Trust, pursuant to the JB Oxford Revocable Government
Trust Agreement, dated as of February 18, 1999, by and between JB Oxford
Holdings, Inc. and Third Capital Partners, LLC, as Trustee.
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SCHEDULE 13D
CUSIP NO. 46610710 PAGE 3 OF 6 PAGES
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Christopher L. Jarratt
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [__]
(b) [__]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [__]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
US
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NUMBER OF 7 SOLE VOTING POWER
SHARES 9,476,782 (1)
-----------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 40,000 (2)
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 8,688,492 (1)
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PERSON 10 SHARED DISPOSITIVE POWER
WITH 40,000 (2)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,516,782 (1)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [__]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
41.5%
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14 TYPE OF REPORTING PERSON*
IN
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(1) Includes (i) 469,540 shares held by the JB Oxford Revocable Government Trust
of which Third Capital Partners, LLC is the Trustee with the power to vote the
469,540 shares held by the Trust, pursuant to the JB Oxford Revocable Government
Trust Agreement, dated as of February 18, 1999, by and between JB Oxford
Holdings, Inc. and Third Capital Partners, LLC, as Trustee; (ii) 40,000 shares
held by Mr. Jarratt's wife; and (iii) 318,750 shares subject to an irrevocable
proxy granted to Mr. Jarratt by Oeri Finance, Inc. and Felix A. Oeri. Mr.
Jarratt is the chief manager of Third Capital Partners, LLC.
(2) Shares held by Mr. Jarratt's wife.
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SCHEDULE 13D
CUSIP NO. 46610710 PAGE 4 OF 6 PAGES
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
James G. Lewis
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [__]
(b) [__]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [__]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
US
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NUMBER OF 7 SOLE VOTING POWER
SHARES 792,800
------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY - 0 -
------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 792,800
------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH - 0 -
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
792,800
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [__]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.2%
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14 TYPE OF REPORTING PERSON*
IN
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CUSIP No. 46610710
Pursuant to Rule 13d-1(k)(1), this Amendment No. 2 to Schedule 13D
Statement is filed jointly on behalf of Third Capital Partners, LLC, a Tennessee
limited liability company ("Third Capital Partners"), Christopher L. Jarratt
and James G. Lewis for the purpose of reporting that Third Capital Partners has
pledged its JB Oxford Holdings, Inc. 9% Secured Convertible Note in the
principal amount of $1.0 million (the "JB Oxford Note") to JB Oxford & Company
("JBOC") to secure Third Capital Partners margin account with JBOC.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 is amended and supplemented as follows:
On February 17, 1999, Third Capital Partners opened a margin account with
JBOC, a wholly-owned subsidiary of JB Oxford Holdings, Inc. ("JB Oxford"). On
September 10, 1999, Third Capital pledged the JB Oxford Note to secure its
margin debt. The margin debt may change from time to time. Interest on the
JBOC margin debt is computed at a select rate above the rate banks charge
securities brokers (the "broker call money rate") and is subject to change
without notice if the broker call money rate changes. To the extent permitted
by law, JBOC has a lien on the JB Oxford Note. The JB Oxford Note is
convertible into shares of JB Oxford's common stock, $0.01 par value per share
(the "Shares"). The Shares issuable upon conversion of the JB Oxford Note are
reported on this Schedule 13D Statement as being beneficially owned by Third
Capital Partners and Mr. Jarratt. A copy of the Customer Account Agreement
specifying the terms of Third Capital Partners' JBOC margin debt is attached as
Exhibit 7.6.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Reference is made to the Customer Account Agreement which is referred to
above in Item 3 and attached as Exhibit 7.6.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 7.6 Customer Account Agreement dated February 17, 1999 by and
between JB Oxford & Company and Third Capital Partners, LLC
Page 5 of 6 Pages
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CUSIP No. 46610710
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 29, 1999 THIRD CAPITAL PARTNERS, LLC
By: /s/ Christopher L. Jarratt
------------------------------------------
Christopher L. Jarratt, Chief Manager
CHRISTOPHER L. JARRATT
/s/ Christopher L. Jarratt
---------------------------------------------
JAMES G. LEWIS
/s/ James G. Lewis
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Page 6 of 6 Pages
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Customer Account Agreement
This contains important information and explanations regarding your JB Oxford &
Company ("JBOC") brokerage investment account and contains additional terms and
conditions which are incorporated by reference in your Account Application with
JBOC. Following acceptance of your JBOC Account Application, you may elect to
establish a Margin Account and/or Option Account. The terms, conditions and
information contained herein apply to all of your accounts with JBOC, including
cash margin and/or option accounts.
1. Upon approval, JBOC will act as your broker for the purpose of
transacting buy and/or sell orders for securities as instructed by you.
All orders for the purchase or sale of securities and other property
authorized by you will be executed and/or processed with the
understanding that an actual purchase or sale is intended, and that it
is your intention and obligation in every case to deliver certificates to
cover all sales or to pay for any purchase on or before settlement date.
2. All transactions will be subject to the rules, regulations, customs and
usages of the exchange and market where executed, and to all applicable
federal and state laws, rules and regulations. Cancellations of open
orders are subject to prior executions.
DEPOSIT OF FUNDS AND EQUITY
3. JBOC may require full payment or an acceptable deposit prior to the
acceptance of any order. In the case of options, JBOC requires cleared
funds in the account prior to the acceptance of any purchases. Prior to
writing covered calls, stock must be long in the account.
TRANSACTION SETTLEMENT
4. The purchase and sale of securities are settled on "settlement date."
Stock transactions are settled on the third business day after the
transaction. You agree to pay JBOC for all securities purchased by
settlement date, and to deliver securities sold in good deliverable form
by settlement date. Exchange and federal regulations require the
liquidation of an account in the event of a failure to pay for a
transaction or a failure to deliver securities in good deliverable form.
5. All checks must be made payable to JB Oxford & Company. All securities
delivered to JBOC must be assigned to JB Oxford & Company at the
applicable section on the reverse side of the certificate(s) or an
attached stock power.
We do not accept cash, foreign drawn checks, bank drafts or third-party
checks. Corporate checks will only be accepted for corporate accounts.
Checks for investment club accounts must be drawn on the club's bank
account.
RESTRICTED SECURITIES
6. Prior to placing an order in connection with any securities subject to
Rule 144 or 145 (d), under the Securities Act of 1933, you must advise
JBOC of the status of the securities and furnish
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JBOC with the necessary documents to clear legal transfer. Delays may
occur in processing such securities and you shall be responsible for
all costs associated with the transfer, sale or processing of
controlled or restricted securities.
COMMUNICATIONS AND NOTICES
7. Communications will be sent to you at the mailing address specified in
your Account Application (or at such other address you may specify in
writing). All communications so sent, whether by mail, telegraph,
messenger or otherwise, shall be considered delivered to you personally,
on the date so transmitted, whether actually received or not. You must
inform us within a reasonable time of any change in your name and/or
address.
CREDIT VERIFICATION
8. You authorize JBOC to make inquiries for the purpose of verifying your
credit worthiness and, if you are married and live in a community
property state, the credit worthiness of your spouse. Such inquiries may
include verifying information you have provided in your Account
Agreement, contacting your employer, and obtaining credit reports.
SECURITIES INVESTORS PROTECTION CORPORATION (SIPC) AND EXCESS SIPC
9. Your account at JB Oxford & Company is currently protected by SIPC up to
$500,000 of which no more than $100,000 may be in cash (excluding Money
Market balances). Additional protection has been secured through National
Union Fire Insurance Company, a subsidiary of AIG, for up to S10,000,000
for securities only.
TERMINATION
10. JBOC reserves the right to terminate your account at any time for any
reason. Upon termination you will remain liable for any debit balances or
deficiencies in your account.
11. You will reimburse JBOC for any cost of collection of any debit balance
or deficiency in connection with any of your accounts, including
reasonable attorney's fees and court costs.
JOINT ACCOUNTS
12. If there is more than one account holder, all account holder's
obligations shall be joint and several. Each joint account holder shall
have authority, acting alone, to take action with respect to the subject
account securities and other property in that account. The signature of
all parties is required on all documents, including but not limited to
letters of authorization, stock powers, new account documents, and margin
and option updates.
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CHANGE IN ACCOUNT INFORMATION
13. You agree to notify JBOC in writing if there is a change in the facts set
forth in the account information of your Account Application. In
addition, you agree to notify JBOC if any of the account holders become
employed by any securities firm, bank, trust or insurance company.
CUSTOMER'S RESPONSIBILITY REGARDING CERTAIN SECURITIES
14. Certain securities may grant the securities holder valuable rights that
may expire unless the holder takes action. These securities include, but
are not limited to: warrants; stock rights; convertible securities;
bonds; and securities subject to a tender or exchange offer.
15. You acknowledge that you are responsible for knowing the rights and terms
of all securities in your account. JBOC is not obligated to notify you of
any upcoming expirations or redemption dates, or to take any action on
your behalf without specific instructions from you except as required by
law and rules of regulatory authorities.
LIENS AND LIQUIDATIONS
16. All securities and other property held in any of your JBOC accounts, to
include any account in which you have any interest, shall be subject to a
general lien for discharge of all your indebtedness and other obligations
to JBOC. Such securities and other property shall be held by us as a
security for payment of any liability or indebtedness you may incur in
any account. JBOC reserves the right to transfer securities and other
properties from any of your other accounts with JBOC, whenever JBOC
determines such a transfer is appropriate for its protection and JBOC
reserves the right to determine, at its sole discretion, which securities
and other property are to be sold and/or purchased in enforcement of this
lien.
17. Circumstances that may require the liquidation of an account include, but
are not limited to: the failure of a customer to pay for securities
purchased or the failure to deliver securities in good form; the failure
to pay any account debit or expense, the filing of a petition of
bankruptcy by or against a customer, an attachment levied against any
account of the customer or any account in which the customer has an
interest, or the customer's death.
LOSSES DUE TO EXTRAORDINARY EVENTS
18. JBOC will not be liable for losses caused directly or indirectly by or as
a result of governmental restriction(s), exchange or market rulings,
wars, strikes or any other condition beyond its control.
MARKET DATA
19. Stock price quotations and other market data provided to you are obtained
from independent pricing services JBOC believes to be reliable. However,
JBOC cannot and does not guarantee the accuracy of such data and will not
be held liable for any losses incurred by your reliance upon the same.
3
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ASSIGNMENTS
20. You acknowledge that any Agreements you have with JBOC shall inure to the
benefit of JBOC, its successors and assigns. JBOC may assign its rights
and duties under any such Agreement to any of its subsidiaries or
affiliates without notice to you, or to any other entity.
PAYMENT FOR ORDER FLOW
21. JB Oxford & Company is a member of the NASD, Chicago Stock Exchange,
Cincinnati Stock Exchange and Pacific Stock Exchange. Our automated
trading system and procedures for trading in equity securities enable us,
in situations where you have not directed your order to a specific
marketplace, to route your order to market centers, including other
broker-dealers where, based on our experience, we can provide you with
what we believe are the best executions, which may be subject to price
improvement. We receive payment per share or, in some cases, reciprocal
order flow consideration from dealers, and credit against exchange fees
in return for orders we route directly. When such remuneration is
received, it is considered compensation to the firm, and the source and
nature of this compensation received by the firm in connection with your
transaction will be disclosed upon written request.
22. FEES & COMMISSION SCHEDULE: Please see enclosed schedule.
23. JB Oxford reserves the right to refuse any order or account.
DEBIT INTEREST
24. INTEREST CHARGES ON DEBIT BALANCES: Your account(s) will be charged
interest monthly on the average daily net debit balance in all of your
accounts, in accordance with JBOC's margin rules at the prevailing rate
as determined by JBOC. The interest charged will appear on your monthly
statement. The rate may change from time to time without prior notice due
to fluctuations in interest rates or other causes. Interest rates are
based on the Interest Rate Table shown in paragraph 32.
25. Interest charges are based an a 360 day interest year. Interest is
computed an the Wednesday preceding the last Friday of the month, except
in December. In December, interest will be computed on the day before the
last business day of the year. In calculating interest, free credit
balances in all accounts will be offset against any debit in the account,
and interest will be charged on the net debit balance, if any.
MARGIN ACCOUNTS
26. SERVICES PROVIDED: If you have a Margin Account with JBOC, JBOC will act
as your broker to purchase or sell securities, on margin, as directed by
you. JBOC agrees to extend credit to you in accordance with its margin
account rules. You will, at all times, be liable for the payment upon
demand of any debit balance or other charge(s).
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27. MAINTENANCE OF MARGIN: You will, at all times, maintain such securities
and other property in your account as margin collateral as required by
JBOC and/or applicable exchange and federal regulations. A margin call
may be issued if your account equity falls below such requirements. JBOC
shall retain sole discretion to determine whether additional collateral
will be required.
28. You acknowledge that JBOC shall not be obligated to request additional
margin in the event your account falls below minimum margin requirements.
Market conditions or other circumstances may not allow JBOC to give you
notice when your account equity becomes deficient, or to allow you time
in which to deposit additional equity. JBOC reserves the right, in its
sole discretion, to sell securities and other property held in your
account(s) as collateral, to cancel open orders, to buy securities and
other property which may be short in your account, to close open option
positions, and to take any other action JBOC deems necessary for its
protection, all without prior notice, advertisement or demand to you.
29. PLEDGE OF SECURITIES AND OTHER PROPERTY: All securities and other
property now and hereafter held, carried or maintained by JBOC, in or for
any account in which you have any interest may be pledged, repledged,
hypothecated or re-hypothecated by JBOC from time to time without notice,
either separately or in common with other securities and property for any
amount due in your account(s) or for any greater amount. JBOC may do so
without retaining in its possession or under its control for delivery, a
like amount of similar securities or other property. You also authorize
JBOC to lend to itself or others securities or other property held by
JBOC on margin for your account or any accounts under your control.
30. SHORT SALES: You agree that any "short" sale shall be designated as such
to JBOC at the time you place such an order, and you hereby authorize
JBOC to mark such order "short." You acknowledge that a short sale is
sale of a security you do not own, and that to facilitate a short sale,
JBOC must borrow stock to cover the delivery to the purchaser(s). If the
stock is recalled by the lender(s) of the securities, JBOC will attempt
to re-borrow the securities but may be forced to cover your short
position on the open market at the then current market price. You will be
liable for any debit balance remaining after a short position has been
closed out.
31. You agree to meet the appropriate margin requirements for your short
account as required by JBOC and/or applicable exchange or federal
regulations. The credit balance generated by short sales in your account
is not a free credit balance. If the market value of your short account
is greater than the short account credit balance, interest will be
charged on the appreciation in value of the short positions, based on the
Interest Rate Table below. If the market value of your short account is
less than the short account credit balance, interest on any debit in the
account will be reduced in relation to the decline in value. Each
Friday's closing price is used to determine the increase or decrease in
the short account and your account is thus marked to the market weekly.
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<TABLE>
<CAPTION>
32. INTEREST RATE TABLE
Average Debit Interest Rate Relative to
Balance Broker's Call Rate
<S> <C> <C>
Less than $10,000 . . . . . . . . . . . . . . . . . .2 3/4 % above broker's call rate
$ 10,000 to $29,999. . . . . . . . . . . . . . . . . 2 % above broker's call rate
$ 30,000 to $49,999. . . . . . . . . . . . . . . . . 1 1/2 % above broker's call rate
$ 50,000 to $99,999. . . . . . . . . . . . . . . . . at broker's call rate
$ 100,000 and above. . . . . . . . . . . . . . . . . 1/4 % below broker's rate
</TABLE>
MARGIN TRADING GUIDE
NOTE: All requirements listed below are subject to change without prior notice.
33. As required by Regulation T of the Federal Reserve Board, 50% of the
purchase price must be deposited within 3 business days, either in good
funds or the equivalent loan value of marginable securities.
34. NASD rules impose a minimum initial equity requirement of $2,000, either
in good funds or the equivalent value of marginable securities.
35. Equity Maintenance Requirements:
1) Diversified - 30% minimum
2) Accounts with more than 60% invested in one stock require a 50%
minimum equity. JBOC reserves the right to impose increased maintenance
requirements at its sole discretion.
MARGINABLE SECURITIES
36. See graph on the following page.
OPTION ACCOUNTS
37. When you open an option account you will be required to sign an Option
Agreement in which you acknowledge your understanding of the risks
involved in dealing in options. You will be required to furnish JBOC with
financial information and your investment objectives. Should your
financial situation or your investment objective change, you must notify
JBOC immediately. Where the term option is used, this reflects all
options including index options and interest rate options.
38. Before purchasing or writing an option you should be aware of the risks
involved. You should familiarize yourself with the business and financial
condition of the issuer of the underlying
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<CAPTION>
MARGINABLE SECURITIES
Initial Requirements House Maintenance NASD Maintenance
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I. STOCK & WARRANTS (LISTED & APPROVED OTC)
A. LONG
<S> <C> <C> <C> <C>
$5.00 per share and over 50% of total cost 30% of market value 25% of market value
$4.00 to 4.99 (Securities must be $5.00 40% of market value
$3.00 to 3.99 or over; Breakdown for 50% of market value
$2.51 to 2.99 House Maintenance only) 60% of market value
$2.50 and under 100% of market value
B. SHORT
$5.00 per share and over 50% of net proceeds On shares priced $5.00 and On shares priced $5.00
over, the greater of 30% or and over, the greater of
$5.00 per share 30% or $5.00 per share
C. SHORT
(Under $5.00 per share) 50% of net proceeds On shares priced under On shares priced under
$5.00, the greater of 100% $5.00, the greater of
or $2.50 per share 100% or $2.50 per share
D. SHORT vs BOX -- 10% of market value of the 10% of market value of
long position the long position
- --------------------------------- --------------------------- ---------------------------- -------------------------
II. CORPORATE BONDS
A. Convertible-Long 50% of total cost over 50% on bonds priced 25% of market value
$70.00. 100% on bonds
priced under $70.00.
Bonds must be rated "A" or
better by Moodys or S&P.
B. Convertible-Short 50% of net proceeds Same as above (A) 30% of market value
C. Non-Convertible-Long 25% of market value 30% of market value 25% of market value
D. Non-Convertible-Short 30% of market value 30% of market value 30% of market value
- --------------------------------- --------------------------- ---------------------------- -------------------------
III. MUNICIPAL BONDS 15% of principal or 25% on bonds priced over 15% of principal or 25%
LONG AND SHORT 25% market value, $70.00. 100% on bonds of market value,
(revenue bonds are NOT whichever is less priced under $70.00. Bonds whichever is less
marginable unless they have an must be rated "A" or better
S&P or Moodys "A" rating or
better) Industrial Revenue Bonds
must be tax exempt
- --------------------------------- --------------------------- ---------------------------- -------------------------
IV. US GOVERNMENT 10% of Principal 5% of principal 5% of principal
OBLIGATIONS
AND AGENCIES
U.S. Treasury and Government 25% of market value 15% of market value Depends on Maturity
Agency Strips
</TABLE>
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security and decide whether the option transaction is appropriate in
light of your financial situation, investment objectives and tax
considerations. The purchase and sale (writing) of Put and Call options
involves a high degree of risk. Such investments are not suitable for all
investors. You should not purchase an option unless you are able to
sustain a total loss of the premium (cost of option) and the other costs
of purchasing the option, and you should not sell (write) an option
unless you own the underlying security or are in position to assume the
substantial risks inherent in writing "naked" options.
39. When you purchase an option, the full premium must be paid by you. An
option purchase cannot be margined. There are, however, special margin
requirements governing the sale of options with which you should
familiarize yourself before commencing an option program. Complete
details on the margin requirements for options are available to you
through JBOC.
40. Sufficient cleared funds should be in your account to cover the costs of
purchasing any option. Option contracts are traded for a specified period
of time and have no value upon expiration. You must advise JBOC if you
wish to enter offsetting transactions by closing out your position, or
you may exercise the option prior to the expiration date. Failure to do
this may result in the option expiring worthless, even though it might
have a monetary value on the expiration date.
41. Options "in the money" 75cents or more at expiration will be
automatically exercised.
42. ALLOCATION OF OPTION EXERCISE ASSIGNMENT NOTICES: When JBOC receives an
exercise notice from the Options Clearing Corporation, JBOC assigns the
notice to a customer who is a writer of an identical option contract.
Exercise assignment notice for option contracts is allocated among
customer short positions pursuant to the FIFO (First In, First Out)
method. All short options positions are liable for assignment at any
time. A more detailed description of the FIFO allocation procedure is
available upon request.
If an exercise notice is assigned to your account, you must deliver the
underlying security to JBOC in the case of a call, and you must deposit
cash with JBOC in the case of a put sufficient to properly margin the
security within a stated period of time.
MONEY MARKET FUND INFORMATION
43. MINIMUM DEPOSIT REQUIRED: The minimum deposit necessary to invest in a
Money Market Fund ranges from $500 to $15,000, depending upon the Fund
you choose, subject to change without prior notification. Please read the
prospectus to determine which Fund is most suitable for you. You may make
subsequent deposits in minimum increments of $100 to $1,000, depending on
the Fund.
44. MONEY MARKET FUND INFORMATION: If you select one of the money market
funds which offers the cash sweeps as your "primary fund," JBOC will
automatically invest free credit balances which meet your Fund's
specified minimum on Mondays based on Friday's closing balance. If Monday
falls on a holiday, appropriate credit balances will be swept the next
business day. Proceeds from the sale of securities will be swept on
settlement date, provided the securities sold have been received in good
deliverable form prior to settlement date. Credit
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balances needed to satisfy a settling transaction or which serve as
collateral for a short sale will not be available for investment. JBOC
will send a confirmation only for the initial transaction activating
your money market account. Your account statement will reflect all money
market activity.
45. CREDIT INTEREST
Credit interest is paid an active investment accounts provided a minimum
free credit balance of $500, pending investment or reinvestment, is
maintained in the account. An active account is one which has trading
activity during the year or is used for investment purposes. Interest
will accrue monthly on the average daily net credit balance in your
account over $500, and will appear on your monthly statement. The rate of
interest may change from time to time without prior notice due to
fluctuations in the interest rates or other causes.
46. Free credit interest, pending investment or reinvestments, will
begin to accrue from the date good funds are available in your
account. Checks deposited to your account will not be deemed good
funds until after a five (5) business day clearance period. Funds
deposited by check are not available for withdrawal for ten (10)
business days.
STATEMENTS AND CONFIRMATIONS
47. STATEMENTS: All transactions including the purchase and sale of
securities, dividends, interest payments and redemptions for securities
held in your account will appear in your monthly account statement.
Purchase and sale transactions will be posted on your statement as of
the transaction settlement date. Securities held on your account will
be listed on your statement.
48. CONFIRMATIONS: (a) Confirmations will be sent out for all purchase and
sale transactions on the next business day following the trade (b) JBOC
does not provide written confirmation of "good until cancelled" orders.
GTC orders are automatically cancelled on the last trade date of the
month following the month the order is entered.
49. Statements of your account and confirmations of the executions of
orders will be conclusive if not objected to by you in writing, the
former within ten (10) days and the latter within two (2) days after
forwarding each confirmation or statement to you by mail or otherwise.
Clerical errors and omissions EXCEPTED.
ARBITRATION
5O. YOU ACKNOWLEDGE THAT YOU HAVE READ AND UNDERSTAND THE FOLLOWING FACTS
ABOUT ARBITRATION PROCEDURES:
- ARBITRATION IS FINAL AND BINDING ON THE PARTIES.
- THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT,
INCLUDING THE RIGHT TO A JURY TRIAL.
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- PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND
DIFFERENT FROM COURT PROCEEDINGS.
- THE ARBITRATOR'S AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS
OR LEGAL REASONING AND ANY PARTY'S RIGHT TO APPEAL OR TO SEEK
MODIFICATION OF FILINGS BY THE ARBITRATORS IS STRICTLY LIMITED.
- THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF
ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES
INDUSTRY.
- NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTION TO
ARBITRATION NOR SEEK TO ENFORCE ANY PRE-DISPUTE ARBITRATION
AGREEMENT AGAINST ANY PERSON WHO HAS INITIATED IN COURT A PUTATIVE
CLASS ACTION; OR WHO IS A MEMBER OF A PUTATIVE CLASS WHO HAS NOT
OPTED OUT OF THE CLASS WITH RESPECT TO ANY CLAIMS ENCOMPASSED BY
THE PUTATIVE CLASS ACTION UNTIL: (i) THE CLASS CERTIFICATION IS
DENIED, OR (ii) THE CLASS IS DECERTIFIED; OR (iii) THE CUSTOMER IS
EXCLUDED FROM THE CLASS BY THE COURT. SUCH FORBEARANCE TO ENFORCE
AN AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER OF ANY
RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE EXTENT STATED HEREIN.
YOU AGREE AND UNDERSTAND THAT ALL AGREEMENTS BETWEEN YOU AND JBOC CONTAIN AN
ARBITRATION CLAUSE THAT REQUIRES ANY CONTROVERSY BETWEEN YOU AND JBOC, ANY OF
ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR AFFILIATES RELATING TO ANY SUCH
AGREEMENTS(S), IN ANY MANNER OR IN ANY WAY ARISING OUT OF YOUR RELATIONSHIP WITH
JBOC TO BE SETTLED BY ARBITRATION IN ACCORDANCE WITH THE RULES THEN IN EFFECT OF
THE NATIONAL ASSOCIATION OF SECURITIES DEALERS. JUDGEMENT UPON AN ARBITRATION
AWARD MAY BE RENDERED IN ANY COURT OF COMPETENT JURISDICTION.
51. YOU AGREE THAT THIS CUSTOMER ACCOUNT AGREEMENT, AND ALL OTHER PRESENT OR
FUTURE WRITTEN AGREEMENTS BETWEEN YOU AND JBOC CONSTITUTE THE COMPLETE
STATEMENT OF THE AGREEMENT BETWEEN YOU AND JBOC. YOUR USE OF THE SERVICES
WHICH ARE THE SUBJECT OF THIS DISCLOSURE BROCHURE AND ANY SUBSEQUENT
MODIFICATIONS TO THIS AGREEMENT WHICH YOU RECEIVE WILL INDICATE YOUR
ACCEPTANCE OF ALL OF THE TERMS OF SUCH AGREEMENT AND ANY MODIFICATIONS
WHICH YOU RECEIVE. IF ANY OF THE TERMS OF SUCH AGREEMENTS AND
MODIFICATIONS TO EXISTING AGREEMENTS IS UNACCEPTABLE TO YOU, DO NOT USE
THAT SERVICE. THIS BROCHURE MAY BE MODIFIED ONLY IN WRITING. IF ANY
PROVISIONS OF THIS AGREEMENT ARE INVALID OR UNENFORCEABLE UNDER
APPLICABLE LAW, IT IS, TO THAT EXTENT, DEEMED OMITTED AND THE REMAINING
PROVISIONS WILL CONTINUE IN FULL FORCE AND EFFECT. THIS AGREEMENT WILL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA, AS APPLIED TO AGREEMENTS PERFORMED IN CALIFORNIA.
52. UNDER NO CIRCUMSTANCES SHALL JBOC, ITS THIRD PARTY VENDORS AND
PROVIDERS, INCLUDING BY WAY OF EXAMPLE BUT NOT LIMITATION,
SECURITIES MARKETS THAT MAKE MARKET DATA AVAILABLE, ADP, SIS,
GLOBAL MARKET INFORMATION, INC. AND PROVIDERS OF TRANSMISSION
SERVICES, BE LIABLE TO YOU OR ANY OTHER PERSON OR ENTITY FOR ANY
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CONSEQUENTIAL, INCIDENTAL, SPECIAL OR INDIRECT DAMAGES,
INCLUDING BUT NOT LIMITED TO LOST PROFITS, TRADING LOSSES AND
DAMAGES THAT RESULT FROM THE DELAY OR LOSS OF THE USE OF
SERVICES. IN NO EVENT SHALL JBOC, ITS THIRD PARTY VENDORS AND
PROVIDERS OF TRANSMISSION SERVICE BE LIABLE FOR ANY LOSS OVER
WHICH IT HAS NO DIRECT CONTROL, SUCH AS COMMUNICATION LINE
FAILURE, COMPUTER FAILURE, UNAUTHORIZED ACCESS OR THEFT, OF ITS
OWN OR ANY OF ITS THIRD PARTY VENDORS OR TRANSMISSION SERVICE
PROVIDERS. IN THE UNITED STATES, THERE ARE CERTAIN STATES THAT
EXCLUDE LIMITATION OF THE DURATION OF IMPLIED WARRANTIES. YOU
MAY HAVE OTHER RIGHTS WHICH VARY FROM STATE TO STATE.
53. YOU AGREE THAT ANY TELEPHONE CONVERSATION WITH JB OXFORD & COMPANY MAY BE
RECORDED AT THE OPTION OF JB OXFORD & COMPANY. CALLS MAY BE MONITORED BY
A SUPERVISOR FOR QUALITY CONTROL PURPOSES.
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