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EXHIBIT 10.1
XXXXXXX XXXXX PROFESSIONAL CLEARING CORP.
000 XXXXXX XXXXXX
XXXXXX XXXX, XXX XXXXXX, 00000
STANDARD OPTION AGREEMENT AND
OPTION ACCOUNT INFORMATION SHEET
INDIVIDUAL & JOINT ACCOUNT
Account No. ___________
This form supplements other information obtained from you for purposes of
approving your options transactions - no options transactions will be allowed
prior to such approval.
1. Customer Name HULL TRADING COMPANY L.L.C. Date of Birth
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2. Address 000 XXXXX XXXXXX XXXXX/XXXXX 0000 XXXXXXX, XX 00000
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3. Employer _________________________________________________________________
4. Occupation _____________________________ Position ________________________
5. Marital Status _________________________ No. of Dependents _______________
6. Estimated Net Worth ____________________ Estimated Liquid Net Worth ______
7. ( ) Investment Real Estate
( ) Cash
( ) Securities
( ) Other(describe) ___________________________________________________
8. Estimated Annual Income ____________________ Spouses Income ______________
9 Past Investment Experiences (specify size, frequency of transactions, type
of transactions and years of experience):
A. Options _______________________________________________________________
B. Stocks/Bonds __________________________________________________________
C. Commodities____________________________________________________________
D. Other (specify)________________________________________________________
10. Investment Objectives (Number in order of Priority):
( )Income ( )Trading Profits ( )Speculation
11. Date combined Disclosure Document and Special Statement for Uncovered
Option Writers Furnished _________________________________________________
12. Types of Option Trading-Anticipated
( )Buy Calls ( )Buy Puts ( )Spreads
( )Write Calls ( )Write Puts ( )Combination (straddles, etc.)
( )Covered ( )Covered
( )Uncovered ( )Uncovered
13. Types of Transactions for Which Account is Approved:
( )Level 1 -- writing covered listed call options
( )Level 2 -- level 1, plus buying listed puts and calls
( )Level 3 -- level 1 and level 2, plus spreading listed options;
buying straddles and combinations; writing puts.
( )Level 4 -- level 1, level 2, and level 3, plus all other types
of transactions (listed and OTC) selling of uncovered call options
including variable (ratio) hedging, straddles and combinations.
14. Is an investment advisory, counselor, attorney or any other person with
authority, phoning in instructions for his account?
( ) Yes ( ) No (If Yes, the next line must be completed)
Name and address of authorized party: TYPE OF POWER
( ) Limited
( ) General
15. If customer refuses to give any background information requested,
check here ( ).
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STANDARD OPTION AGREEMENT
INDIVIDUAL AND JOIN ACCOUNTS ONLY
Gentlemen:
In connection with any transaction executed by you on my behalf for the
purchase and sale of put and call options, I agree as follows:
1. All transactions shall be subject to the constitution, rules, regulations,
customs, and usages or the exchange of the exchange, or market and its
clearing house, if any, where executed. I further agree that I will not,
either alone or in concert with others, violate the position or exercise
limits which the Exchanges or marketplace where executed, may establish
from time to time as set forth in the booklet "Characteristics and Risks or
Standardized Options."
2. In the case of options sold or written by me in a cash account:
(a) With respect to a call option which if exercised against me will
require the delivery of securities sold, I will keep such securities in
my account with you until the expiration of the option period, and will
not sell or withdraw such securities. If the option is exercised, you
may deliver such securities to the purchaser without previous notice to
me.
(b) With respect to any put option which if exercised against me will
require payment for securities purchased, I will keep in my account
sufficient funds from such payment until the expiration of the option
period, and will not withdraw such funds or utilized them for any
purpose . If the option is exercised you may use such funds for the
purchase of such securities without previous notice to me.
3. Any securities and funds held by you in any account of mine with you shall
be held by you as security from the performance by me of my obligations to
you under this agreement.
4. As option transactions involve a high degree of risk, I understand that:
(a) I should not purchase an option unless I am able to sustain a total
loss of the premium and transaction costs, and I should not write a
call option unless I either own the underlying security (or a security
convertible, exchangeable, or exercisable into such underlying
security) or am able to sustain substantial financial losses, and that
I should not write a put option unless I am able to sustain substantial
financial losses.
(b) I may not be able to close a position in the event that a secondary
market in the option ceases to exist or the listing exchange restricts
or suspends trading in the option.
5. I have been advised of and agree to abide by your policies and federal
regulations regarding margining of options and related transactions.
6. I agree to advise you of any changes in my financial situation and needs,
experience, or investment objectives.
7. In case of my insolvency, death or attachment of my property, you may, with
respect to any pending options, take such steps as you consider necessary
to protect yourself against loss.
8. Any agreement by me with you, whether previously or hereafter made
applicable to any account of mine with you shall also apply to such option
transactions except to the extent which it conflicts with this agreement.
In the event of a conflict, this agreement shall control, and where this is
no conflict, each provision of each agreement shall apply.
9. I(we) have received and read the booklet entitled "Characteristics and
Risks of Standardized Options", the Special Statement for Uncovered Option
Writers, the Equity Flex Option Disclosure Document, and the Xxxxxxx Xxxxx
Professional Clearing Corp. ("MLPCC") allocation disclosure statement and
am aware of the special risks attendant to option trading. The statements
contained on this form are accurate.
10. I have reviewed the background and financial information contained on the
reverse side of this agreement and verify that it accurately reflects the
information which I furnished your company. I have also reviewed my
approval level of trading online 13 and it is consistent with my investment
objectives as well as the degree of risk I am willing to assume in relation
to options trading.
11. In the case of an option scheduled to expire, the notification must be
given to MLPCC before 5:00 P.M. New York time on the business day prior to
the expiration date. If I fail to notify you to exercise an option my
account(s), you may exercise buy are not obligated to exercise for my
account only those options in the money in an around sufficient for them to
be exercised by the Options Clearing Corporation.
12. Regarding any margin transactions I may make and supplementing the terms
and conditions of your margin agreement, in the event I do not meet your
margin calls promptly, you are authorized in your sole discretion, and
without notification to me, to take any and all steps necessary to protect
yourselves in connection with put or call transactions made for my account,
including without limitation to the right to buy or sell short, or short
exempt, for my account and risk any part or all of the shares represented
by options endorsed by you for my account, or to buy, sell or exercise
(including but not limited to exercising a long option(s) hedging short
position(s) for my account and risk any puts or calls as you may deem
necessary to fully protect yourselves. Any and all losses and expenses
incurred by you in this contract will be reimbursed by me.
13. AGREEMENT TO ARBITRATE CONTROVERSIES
- ARBITRATION IS FINAL AND BINDING
- THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT, INCLUDING
THE RIGHT TO A JURY TRIAL.
- PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND DIFFERENT
FROM COURT PROCEDURES, THE ARBITRATORS' AWARD IS NOT REQUIRED TO INCLUDE
FACTUAL FINDINGS OR LEGAL REASONING AND ANY PARTY'S RIGHT TO APPEAL OR TO
SEEK MODIFICATION OF RULINGS 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.
HAVE AGREED THAT ALL CONTROVERSIES WHICH MAY ARISE BETWEEN US, OR BETWEEN
ME AND THE ORGANIZATION THAT HAS INTRODUCED MY ACCOUNT CARRIED BY YOU,
INCLUDING BUT NOT LIMITED TO THOSE INVOLVING ANY TRANSACTION OR THE
CONSTRUCTION, PERFORMANCE, OR BREACH OF THIS OR ANY OTHER AGREEMENT BETWEEN
US, WHETHER ENTERED INTO PRIOR, ON OR SUBSEQUENT TO THE DATE HEREOF, SHALL
BE DETERMINED BY ARBITRATION. ANY ARBITRATION UNDER THIS AGREEMENT SHALL
BE CONDUCTED ONLY BEFORE THE NEW YORK STOCK EXCHANGE, INC., THE AMERICAN
STOCK EXCHANGE, INC., OR ARBITRATION FACILITY PROVIDED BY ANY OTHER
EXCHANGE, THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. OR THE
MUNICIPAL SECURITIES RULEMAKING BOARD, AND IN ACCORDANCE WITH ITS
ARBITRATION RULES THEN IN FORCE. I/WE MAY ELECT IN THE FIRST INSTANCE
WHETHER ARBITRATION SHALL BE CONDUCTED BEFORE THE NEW YORK STOCK EXCHANGE,
INC., THE AMERICAN STOCK EXCHANGE, INC., OTHER EXCHANGES, THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC. OR THE MUNICIPAL SECURITIES
RULEMAKING BOARD, BUT IF I/WE/FAIL TO MAKE SUCH ELECTION, BY REGISTERED
LETTER OR TELEGRAM ADDRESSED TO YOU AT THE OFFICE WHERE I MAINTAIN MY
ACCOUNT, BEFORE THE EXPIRATION OF FIVE DAYS AFTER RECEIPT OF A WRITTEN
REQUEST FROM YOU TO MAKE SUCH ELECTION, THEN YOU MAY MAKE SUCH
ELECTION JUDGMENT UPON THE AWARD OF ARBITRATORS MAY BE ENTERED IN ANY
COURT, STATE OR FEDERAL, HAVING JURISDICTION.
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.
14. Absent the written designation of an agent to transact business on my
behalf (power of attorney). I alone may make trading decisions in my
account; however, unless I give specific instructions to the contrary, you
may exercise discretion in the selection of the exchange or marketplace of
the execution of dually traded options.
15. THIS AGREEMENT AND ITS ENFORCEMENT SHALL BE GOVERNED BY THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO ITS CHOICE OF LAW OR CONFLICTS OF LAW
PRINCIPLES, SHALL COVER INDIVIDUALLY AND COLLECTIVELY ALL ACCOUNTS WHICH
THE UNDERSIGNED MAY OPEN OR REOPEN WITH YOU; OR WHICH MAY BE INTRODUCED TO
YOU, INCLUDING YOUR SUBSIDIARIES AND AFFILIATES, THROUGH THE COURTESY OF
THE AFOREMENTIONED INTRODUCING FIRM; SHALL INURE TO THE BENEFIT OF YOUR
AFFILIATES AND YOUR SUCCESSORS, AND THOSE OF THE AFOREMENTIONED
INTRODUCING FIRM, WHETHER BY MERGER, CONSOLIDATION OR OTHERWISE, AND
ASSIGNS, AND THEIR RESPECTIVE EMPLOYEES AND AGENTS; YOU MAY TRANSFER
ACCOUNTS OF THE UNDERSIGNED TO YOUR SUCCESSORS AND ASSIGNS AND THOSE OF THE
AFOREMENTIONED INTRODUCING FIRM; AND THIS AGREEMENT SHALL BE BINDING UPON
THE HEIRS, EXECUTORS, ADMINISTRATORS, SUCCESSORS AND ASSIGNS OF THE
UNDERSIGNED.
ALLOCATION DISCLOSURE STATEMENT
Exercise assignment notices for option contracts are allocated among
customer short positions pursuant to computerized procedures which randomly
selects from all customers short option positions, including positions
established on the day of assignment, those contracts which are subject to
exercise. All short positions are liable for assignment at any time. A
more detailed description of our random allocation procedure is available
upon request.
BY SIGNING THIS AGREEMENT, I/WE ACKNOWLEDGE (1) THAT, IN ACCORDANCE WITH
XXXXXXXXX 00, X/XX AGREE IN ADVANCE TO ARBITRATE ANY CONTROVERSIES WHICH
MAY ARISE WITH MLPCC, OR BETWEEN US AND THE ORGANIZATION THAT HAS
INTRODUCED MY/OUR ACCOUNT CARRIED BY YOU AND, (2) RECEIPT OF A COPY OF THIS
AGREEMENT.
/s/ XXXXXX X'XXXXXX 12/22/98
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Customer's Signature Date Signed Second Signature Date Signed
(Required for Joint Account)
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Registered Options Principal (Date Signed)
(over)
