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"Amendment of Lamson Capital Mgt to Coby Lamson Capital Mgt CTA coming shortly" a Commodity Trading Advisor Registered with the Commodity Futures Trading Commission and a Member Firm of the National Futures Association
No person is authorized by Lamson Capital Management Inc. to give any information or to make any representations not contained herein. The delivery of this Disclosure Document does not imply that the information it contains is correct subsequent to the date shown below. THE COMMODITY FUTURES TRADING COMMISSION HAS NOT PASSED UPON THE MERITS OF PARTICIPATING IN THIS TRADING PROGRAM NOR HAS THE COMMISSION PASSED ON THE ADEQUACY OR ACCURACY OF THIS DISCLOSURE DOCUMENT. The date of first intended use of this Disclosure Document is March 31, 2008
RISK DISCLOSURE STATEMENT
THE RISK OF LOSS IN TRADING COMMODITIES CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. IN CONSIDERING WHETHER TO TRADE OR TO AUTHORIZE SOMEONE ELSE TO TRADE FOR YOU, YOU SHOULD BE AWARE OF THE FOLLOWING:
IF YOU PURCHASE A COMMODITY OPTION, YOU MAY SUSTAIN A TOTAL LOSS OF THE PREMIUM AND OF ALL TRANSACTION COSTS.
IF YOU PURCHASE OR SELL A COMMODITY FUTURE, OR SELL A COMMODITY OPTION, YOU MAY SUSTAIN A TOTAL LOSS OF THE INITIAL MARGIN FUNDS AND ANY ADDITIONAL FUNDS THAT YOU DEPOSIT WITH YOUR BROKER TO ESTABLISH OR MAINTAIN YOUR POSITION. IF THE MARKET MOVES AGAINST YOUR POSITION, YOU MAY BE CALLED UPON BY YOUR BROKER TO DEPOSIT A SUBSTANTIAL AMOUNT OF ADDITIONAL MARGIN FUNDS, ON SHORT NOTICE, IN ORDER TO MAINTAIN YOUR POSITION. IF YOU DO NOT PROVIDE THE REQUESTED FUNDS WITHIN THE PRESCRIBED TIME, YOUR POSITION MAY BE LIQUIDATED AT A LOSS, AND YOU WILL BE LIABLE FOR ANY RESULTING DEFICIT IN YOUR ACCOUNT.
UNDER CERTAIN MARKET CONDITIONS, YOU MAY FIND IT DIFFICULT OR IMPOSSIBLE TO LIQUIDATE A POSITION. THIS CAN OCCUR, FOR EXAMPLE, WHEN THE MARKET MAKES A "LIMIT MOVE."
THE PLACEMENT OF CONTINGENT ORDERS BY YOU OR YOUR TRADING ADVISOR, SUCH AS A "STOP-LOSS" OR "STOP-LIMIT" ORDER, WILL NOT NECESSARILY LIMIT YOUR LOSSES TO THE INTENDED AMOUNTS, SINCE MARKET CONDITIONS MAY MAKE IT IMPOSSIBLE TO EXECUTE SUCH ORDERS.
A "SPREAD" POSITION MAY NOT BE LESS RISKY THAN A SIMPLE "LONG" OR "SHORT" POSITION.
THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN COMMODITY TRADING CAN WORK AGAINST YOU, AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. IN SOME CASES, MANAGED COMMODITY ACCOUNTS ARE SUBJECT TO SUBSTANTIAL CHARGES FOR MANAGEMENT AND ADVISORY FEES. IT MAY BE NECESSARY FOR THOSE ACCOUNTS THAT ARE SUBJECT TO THESE CHARGES TO MAKE SUBSTANTIAL TRADING PROFITS TO AVOID DEPLETION OR EXHAUSTION OF THEIR ASSETS. THIS DISCLOSURE DOCUMENT CONTAINS, AT PAGES 2-5, A COMPLETE DESCRIPTION OF EACH FEE TO BE CHARGED TO YOUR ACCOUNT BY THE COMMODITY TRADING ADVISOR.
THIS BRIEF STATEMENT CANNOT DISCLOSE ALL THE RISKS AND OTHER SIGNIFICANT ASPECTS OF THE COMMODITY MARKETS. YOU SHOULD, THEREFORE, CAREFULLY STUDY THIS DISCLOSURE DOCUMENT AND COMMODITY TRADING BEFORE YOU TRADE, INCLUDING THE DESCRIPTION OF THE PRINCIPAL RISK FACTORS OF THESE INVESTMENTS AT PAGES 9-11.
THIS COMMODITY TRADING ADVISOR IS
PROHIBITED BY LAW FROM ACCEPTING FUNDS IN THE TRADING ADVISOR'S NAME
FROM A CLIENT FOR TRADING COMMODITY INTERESTS. YOU MUST PLACE ALL FUNDS
FOR TRADING IN THIS TRADING PROGRAM DIRECTLY WITH A FUTURES COMMISSION
MERCHANT. TABLE OF CONTENTS Page # Risk Disclosure Statement........................................................................................................ ii Table of Contents...................................................................................................................... iv Description of the Advisor.......................................................................................................... 1 Diversified Growth Program...................................................................................................... 1 DGP Trading Discipline............................................................................................................. 1 Notional Fees............................................................................................................................. 2 Fees........................................................................................................................................... 3 Account Start-Ups, Strategy/Program Changes, Partial Withdrawals, and Terminations....... 6 Affiliations with Futures Commission Merchants and Introducing Brokers............................... 7 Commodity Trading by the Advisor and Its Principals............................................................... 7 Conflicts of Interest.................................................................................................................... 8 Risk Factors.............................................................................................................................. 9 Past Performance................................................................................................................... 12 Tax Aspects............................................................................................................................. 15 Acknowledgement of Receipt of Disclosure Document......................................................... 16 DESCRIPTION OF THE ADVISORLamson Capital Management Inc. (the Advisor) is located in Central Point, Oregon and was formed as a corporation on January 24, 2008 in Oregon. The Advisor was registered as a commodity trading ("CTA") with the Commodity Futures Trading Commission (the CFTC) and became a member of the National Futures Association (the NFA) on February 25, 2008. The Advisor's address is 1130 Grouse Ridge Drive, Central Point, Oregon 97502. Its telephone number is (541) 664-3509.
Dennis Lamson ("Lamson") is President/CEO of Geyser Futures, Inc. ("Geyser"). Geyser is a registered Introducing Broker, guaranteed by Vision Financial Markets LLC. Lamson became registered as an associated person and principal of Geyser in June of 2000 and still maintains this registration. Lamson became registered as a principal of the Advisor on February 14, 2008 and as an associated person of the Advisor on February 25, 2008. Past performance information can be found on page 12. DIVERSIFIED GROWTH PROGRAM
Lamson Capital Management Inc. ("LCM") utilizes a proprietary indicator to initiate all trade entries both long and short in the Diversified Growth Program ("DGP"). The indicator is an integral part of the DGP. It can be used in every time frame and in any market. It was written and back tested for two years prior to using it to trade client funds beginning in 2003. The indicator was constructed to identify four critical moments in time that occur in all markets. They are:
1. When a market is experiencing a buying climax top; 2. When a market is experiencing a selling climax bottom; 3. When a market is fully compressed and is breaking out of its trading range; 4. When a market has entered into an above the norm state of momentum either up or down.
These four critical junctures provide the most favorable risk/reward trade entry points and enables LCM to achieve its goals which are to buy low, sell high, and capture profits, while remaining within its loss limit discipline.
DGP TRADING DISCIPLINE
1. Diversification. LCM ‘s diversification strategy is to take full advantage of the non-correlated nature of many commodities and futures markets. Nobel prize winning studies have proven that by investing in non-correlated markets, over time, portfolio volatility may be reduced, and potentially the portfolio may experience higher rates of return due to this diversification. In the DGP's discipline, the goal is to have, when possible, at least three and preferably as many as ten non-correlated markets within each account. Of course the size of the account will limit the number of markets we are able to utilize and still stay within our prudent money management leverage limits.
2. Limited Leverage. LCM's goal is to limit account leverage to as high a degree as much as possible while still maintaining the potential for significant capital gains over time. As a general rule, LCM will use no less than 5-10% of the value of each account to meet required margin, with a maximum leverage of 20% of the value of any given account.
3. Loss Limits. LCM utilizes loss-limiting stops within its trading style. Stops are placed to limit a loss on any given trade to no more than 1-3% of the account value. Of course, markets sometimes have very dramatic moves that can produce losses beyond that amount.
4. Markets Traded. In the Diversified Growth Program The Advisor will trade in Mini Dow, Mini Nasdaq, Mini S&P 500, Gold, Silver, Eurodollar, Ten-Year Note, Five-Year Note, US Dollar Index, Canadian Dollar, Australian Dollar, Swiss Franc, Mini Crude Oil, Live Cattle, Live Hogs, Corn, Soybean Oil, SoyMeal, Wheat, Cocoa, Cotton, Sugar and option strategies using these markets.
In the Aggressive Diversified Growth Program The Advisor will trade all markets listed in the Diversified Growth Program plus Natural Gas, Mini Natural Gas, Heating Oil, New York Harbor Blendstock RBOB, Coffee, Soybeans, Copper, Full Size Gold, Full Size Silver, All Forex Currencies, Euro Currency, British Pound, Japanese Yen and option strategies using these markets.
NOTIONAL FEES
Notional equity also creates additional leverage in an account relative to the cash in such account. This additional leverage results in proportionately greater risk of loss. While the possibility of losing all of the cash in an account is present in all accounts, accounts that contain notional equity have a proportionately greater risk of loss.
You are reminded that the account size you have agreed to in writing ("the nominal" or "notional" account size) is not the maximum possible loss that your account may experience.
You should consult the account statements received from your futures commission merchant in order to determine the actual activity in your account, including profits, losses, and current cash equity balance. To the extent that the equity in your account is at any time less than the nominal account size you should be aware of the following:
1. Although your gains and losses, fees and commissions measured in dollars will be the same, they will be greater when expressed as a percentage of account equity.
2. You may receive more frequent and large margin calls.
3. The following conversion chart may be used to convert the RORs in the capsule to corresponding RORs for particular partial funding level.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.
FEES Clients are free to select an Introducing Broker of their choice, if any. Introducing Brokers may charge Client accounts an upfront fee of up to 6% of the capital contribution to the client's account. Furthermore, the selection of an Introducing Broker by a client is limited to those that agree to the following fee structure:
Each Introducing Broker may charge either a round turn commission up to $59.00 inclusive of all trading fees and commissions, or in the alternative (b) .31% of ending monthly net asset value plus $23.00 roundturn commission inclusive of all trading fees and commissions. The Client can choose an IB who uses one of these commission structures or may choose to have their account introduced by Geyser, an affiliate of the Advisor. Geyser may charge the account an upfront fee. Please refer to pages 8-9 for a further discussion of the conflicts of interest.
Except as for provided below, the Advisor will receive as compensation for its advisory services, a monthly management fee of 1/12th of 1% (1% annually) of the account's Net Asset value and an incentive fee of 20% of new monthly Trading Profits. All management fees will be based on the appropriate "nominal" account size, which is the designated account size for trading purposes and may include funds other than those held in the trading account. For example, if the account is leveraged 2 to 1, and a 1% management fee is charged, the effective rate on actual funds deposited is 2%. The incentive fee is paid only if an account has new Trading Profits. Thus, if the account experiences a loss after an incentive fee is paid, the Advisor will retain the payment but will not receive another incentive fee until the account has subsequent Trading Profits. At the Advisor's discretion, they may pay persons or firms who introduce accounts to it a portion of the fees it receives from such accounts. Additionally, each account will be assessed a $25.00 monthly accounting fee. Net Asset Value means the account's total assets less total liabilities, determined according to the following principles, and where no principle is governing, then on the basis of generally accepted accounting principles, consistently applied. (a) Net Asset Value shall include any unrealized profit or loss on open positions. (b) All open positions shall be valued at their then market value which means, with respect to open positions, the settlement price as determined by the exchange on which the transaction is effected or the most recent appropriate quotation as supplied by the account's commodity broker or banks through which the transaction is effected, except that United States Treasury bills (not futures contracts thereon) shall be carried at cost plus accrued interest. If there are no trades on the date of the calculation due to operation of the daily price fluctuation limits or due to a closing of the exchange on which the transaction is executed, the contract will be valued at the nominal settlement price as determined by the exchange. (c) Brokerage commissions and fees shall be treated as a liability of the account upon the initiation of a position. Incentive fees payable to the Advisor on Trading Profits shall be accrued for purposes of calculating Net Asset Value.
Trading Profits for purposes of calculating the Advisor's incentive fee only, during a month shall mean the cumulative profits (over and above the aggregate of previous Period profits) after deduction for accrued brokerage commissions and management fees payable to the Advisor. Trading Profits shall include both realized and unrealized profits and interest received by the account on its assets. If Trading Profits for a Period are negative, it shall constitute a "Carryforward Loss" for the beginning of the next Period. No incentive fees shall be payable to the Advisor until future Trading Profits for the ensuing Period exceed Carryforward Loss. To the extent amounts are withdrawn from the account at a time when the account has a loss, any loss attributed to such amounts shall not be carried forward to reduce future Trading Profits.
Fee Payment.
Management and incentive fees are typically paid to the Advisor by the
account's FCM from funds in client's account, in accordance with the
terms of the Customer Agreement. If the Advisor has not received
payment within fifteen (15) days of invoicing, the client will be
notified, with a copy to his FCM. If payment still has not been
received within ten (10) days after notice date, the Advisor reserves
the right to liquidate all positions in the account and will have no
liability for losses. When an account closes, the Client authorizes the
FCM to pay any fees due from the account upon receipt by such party of a
billing statement from the Advisor.
ACCOUNT START-UPS, STRATEGY/PROGRAM CHANGES, PARTIAL WITHDRAWALS AND TERMINATIONS
The following contains important policies and procedures relating to new account startups, switching of accounts to different strategies/programs, partial withdrawals and account terminations.
New Accounts. Trading will commence on new accounts once, to the best of the Advisor's knowledge, all account paperwork is in order, the account is fully funded, and desirable trades are available.
Additions to or Partial Withdrawals from the Account. Client may add funds to his account at any time. Partial withdrawals also may be initiated at any time with a request written from Client to Advisor. Advisor requires (5) trading days, starting the day following his receipt of a withdrawal request to adjust positions, which may include exiting existing and/or adding new positions, if necessary, to meet the amount requested and maintain a prudent reserve. At the end of this period, provided there are no keypunch errors, funds will be available for withdrawal. Advisor reserves the right to terminate the account should withdrawals reduce the Account size to a level below Lamson Capital Management Inc.'s then-current minimum requirements. [Note: For all notices mentioned in this section, acceptable deliveries of written notice from Client to Advisor are regular mail, overnight mail, facsimile transmission, and courier. E-mail communication is not acceptable for these purposes.]
Terms and Conditions
for Terminating this Agreement. Client may terminate this
agreement at any time. There is no deadline or any specific window of
time to accomplish this. But there are important steps to be taken that
involve both Client and Advisor. Client must send a written notice of
termination to Advisor. On receipt of the notice, Advisor may initiate
a conversation with Client for clarification purposes. On the trading
day following receipt of the notice, and any Advisor/Client
conversation, Advisor will begin to offset positions with careful
consideration for Client's best financial interest. Advisor requires up
to five(5) trading days to diligently complete that process at the end
of which the Account will be all in cash (barring the occurrence of a
keypunch error). It is worth noting that trading is an ongoing activity
and it is possible that trades may be initiated in good faith
immediately before Advisor has any knowledge of Client's intention to
terminate. Advisor also has the right to terminate this agreement at
any time upon written notice to Client. Client shall be liable for all
costs, expenses and losses incurred to liquidate open positions upon
termination. AFFILIATIONS WITH FUTURES COMMISSION MERCHANTSAND INTRODUCING BROKERS
Client funds for trading an Advisor's program may not be held by the Advisor. They must be held by a Futures Commission Merchant ("FCM"), whose role includes the record keeping of funds and fees and providing the client with statements of his account. Lamson Capital Management Inc. has selected Vision as the sole FCM to hold client funds for trading all accounts under a $250,000 threshold. Accounts above $250,000 may utilize a FCM of their choosing. Both Vision and the Advisor are well known entities to each other. Their mutual acquaintance and the Advisor's personal knowledge of operating procedures are likely to accrue efficiency benefits and smoothness of operation to clients with accounts at Vision. Vision is located at One Whitehall Street, 15th floor, New York, New York, 10004.
The client is free to select the Introducing Broker of his choice, if any. As previously stated the Introducing Broker selected by the client may charge Client accounts an upfront fee of up to 6% of the capital contribution to the Client's account. Lamson Capital Management Inc. does not participate in such upfront fees. Please note that this charge is not reflected in the performance of the Commodity Trading Advisor (as set forth on pages 12-14 of this document) and could have a significant impact on the customer's ability to achieve similar returns.
COMMODITY TRADING BY THE ADVISOR AND ITS PRINCIPALS
The Advisor and its principals may trade commodity interests for their
own accounts. The accounts may or may not use the same methods being
employed to trade client accounts. Because of their confidential
nature, records of such trading will not be made available to clients
for inspection. CONFLICTS OF INTEREST
The Advisor may pay persons or firms who introduce accounts to it a portion of the fees it receives from such accounts. As a result, persons or firms who introduce your account to the Advisor may have an incentive to do so based on the payments they will receive from the Advisor. Additionally, the Avisor's IB (Geyser Futures, Inc.) may also introduce accounts and receive commission (up to $59 per position) on the trades placed in the accounts introduced by the Advisor's IB. Geyser Futures, Inc. is guaranteed by Vision Financial Markets LLC. There are no actual or potential conflicts of interest with Vision as it relates to the trading program.
The Advisor and its principals may trade commodity interests directly for their own account. Trading activity in these accounts may differ from the trading activity in the accounts the Advisor manages. Such trading may be more or less aggressive than that engaged in for client accounts. In fact, it is possible that the positions taken by the Advisor may not be held for the same period of time as, and may even be opposite to, those positions taken by the Advisor on behalf of the accounts it manages (e.g. the managed account may be long whereas the Advisor is short that commodity in his account). The commodities traded in these account may differ from those traded in client accounts. Thus, no assurance may be given that the trading results in the accounts will be the same as the performance in client accounts.
There are position limits established by regulatory authorities that limit the position size in various commodities that the Advisor and its principals can control on any given day. The Advisor may, on any given day, trade for his account, up to the position limits established by the regulatory authorities and therefore would be unable to trade those commodities (or would be required to take smaller positions) for client accounts in those instances. If this were to occur, the Advisor does not know what effect it will have on the performance results of accounts it manages.
It is likely that an account's FCM will effect transactions for many customers. Since the identity of the purchaser and seller are not disclosed until after the trade, it is possible that the FCM could effect transactions for clients in which the other party to the transactions is the Advisor.
In the event there is a split or partial fill on the orders placed by
the Advisor, each client will receive the percent of the split or
partial fill in relationship to the overall order, in their account.
For example, if only 50% of the total order was filled, then 50% of your
positions as it relates to your account size would be filled. Split and
partial fills may occur from time to time, however, this information
will not be made available to the clients. The Advisor is compensated on a management and an incentive fee which is based on the profits generated. Therefore, the Advisor would have a conflict of interest to place customers in positions where the risk/reward potential is greater than if the Advisor was not compensated in this manner.
The Advisor enters all orders (including orders for proprietary accounts) using an average pricing system. [See "Affiliations with Futures Commission Merchants and Intorducing Brokers".] However, no assurance is given that the performance of all accounts controlled by the Advisor will be identical due to, among other things, account size, the time at which the account was opened or closed, and leverage.
In the event that a client should choose Geyser Futures, Inc., the CTA would have a conflict of interest resulting from an incentive to trade the client's account more frequently and thus generate increased brokerage commissions for Geyser Futures, Inc. The same conflict would apply to any account wherein the CTA was directly receiving the commission as there could be an incentive to trade the account more frequently.
RISK FACTORS
A prospective client interested in opening a managed account with the Advisor should carefully consider the highly speculative nature of trading commodity interests and the possibility that he may lose more than the amount of money initially deposited in his commodity brokerage account. The risks of opening an account with the Advisor include, but are not limited to, the fact that:
1. Futures prices are highly volatile. Price movements of commodity futures contracts are influenced by, among other things changing supply and demand relationships, weather, government, agricultural trade, fiscal, monetary and exchange control programs and policies, national and international political and economic events, and changes in interest rates. In addition, governments from time to time intervene, directly and by regulation, in certain markets, particularly currencies and gold. Such intervention is often intended to influence prices directly. There is no assurance that the Advisor's advice will result in profitable trade or that a customer will not incur substantial losses.
2. Trading commodity futures contracts and options thereon is highly leveraged and a small move in the price of a futures or options contract may result in immediate and substantial losses. Clients may incur, and will be responsible for, trading losses in excess of the capital contributed to the account. All funds deposited into the account must represent risk capital. Clients acknowledge that no "safe" trading system has ever been devised and that no one can guarantee profits or freedom from loss in trading commodity futures and options thereon.
3. Most United States commodity exchanges limit price fluctuations in certain commodity interest prices during a single day by means of "daily price fluctuation limits" or "daily limits." The daily limit, which is set by most exchanges for all but a portion of the expiration month, imposes a floor and a ceiling on the prices at which a trade may be executed, as measured from the last trading day's close. While these limits were put in place to lessen margin exposure, they may have certain negative consequences for a customer's trading. For example, once the price of a particular contract has increased or decreased by an amount equal to the daily limit, thereby producing a "limit-up" or "limit-down" market, positions in the contract can neither be taken nor liquidated unless traders are willing to effect trades at or within the limit. Contract prices in various commodities have occasionally moved the daily limit for several consecutive days with little or no trading. Similar occurrences could prevent Lamson Capital Management Inc. from promptly liquidating unfavorable positions and subject a participating customer to substantial losses that could exceed the margin initially committed to such trades.
4. The existence of speculative position limits may limit the number of futures positions the Advisor can control for any account limiting or reducing profit opportunities. There are position limits established by regulatory authorities that limit the position size in various commodities that the Advisor and its principals can control on any given day. The Advisor may, on any given day, trade for his account, up to the position limits established by the regulatory authorities and therefore would be unable to trade those commodities (or would be required to take small positions) for client accounts in those instances. This could have a detrimental effect on the performance of the customer accounts.
5. Accounts will incur substantial fees and expenses regardless of whether profits are realized, including management fees and brokerage commissions. These fees, which will include a $59.00 commission, a $25.00 accounting fee, and a 1% management fee must be overcome before the account can break-even. (see, "Fees" which are fully detailed on Pages 2-4 of the Document).
6. There are conflicts of interest to which the Advisor is subject. These conflicts of interest should be carefully evaluated prior to entering into an agreement with the Commodity Trading Advisor. The conflicts of interest are fully detailed on Pages 8 and 9 of the Document.
7. The Advisor's trading and operations are solely dependent on the services of Mr. Lamson. The loss of his services would make it impossible for the Advisor to continue trading (see, "Conflicts of Interest" Pages 8 and 9).
8. The Advisor manages, and intends in the future to manage, other accounts. Not only may the Advisor have financial incentives to favor certain of such accounts, but also the larger the amount of equity under its management, the more difficult it may be for it to trade successfully. There appears to be a tendency for the rates of return achieved by trading advisors to decrease as assets under management increase. The Advisor has not agreed to limit the amount of funds it will manage. There can be no assurance that the Advisor's trading of increased funds will not have an adverse effect on performance.
9. As is noted above, the profitability of an account will be determined solely by the success of the Advisor's trading strategy. Futures trading is a zero sum, risk-transferring activity in which, by definition, for every gain there is an equal and corresponding loss (plus the cost of transaction and advisory fees). Regardless of past performance, there is no guarantee that the strategies used by the Advisor will be successful or will not incur losses.
10. The relatively small minimum size of the accounts the Advisor will trade, $100,000, (CTA in its sole discretion may take accounts with $50,000 notionally traded as $100,000) may result in substantial volatility since a large portion of the account's equity may be committed to margin. This increased volatility may result in frequent margin calls from an account's FCM and the liquidation of the account at an inopportune time if such margin calls are not, or cannot, be met.
11. Under CFTC regulations, FCMs are required to maintain customer's assets in a segregated account. If a customer's FCM fails to do so, the customer may be subject to risk of loss of funds in the event of its bankruptcy. Even if such funds are properly segregated, the customer may still be subject to a risk of a loss of his funds on deposit with the FCM should another customer of the FCM or the FCM itself fail to satisfy deficiencies in such other customer's accounts. Bankruptcy law applicable to all U.S. futures brokers requires that, in the event of the bankruptcy of such a broker, all property held by the broker, including certain property specifically traceable to the customer, will be returned, transferred or distributed to the broker's customers only to the extent of each customer's pro-rata share of all property available for distribution to customers. If any futures broker retained by the customer were to become bankrupt, it is possible that the customer would be able to recover none or only a portion of its assets held by such futures broker. PAST PERFORMANCE
The CFTC requires each commodity trading advisor to disclose the past performance history of all client accounts directed by it and certain of its principals for the previous five years and the year-to-date.
The data presented in the following tables reflect the composite performance of those accounts, net of all commissions and fees. THIS TRADING ADVISOR PREVIOUSLY HAS NOT DIRECTED ANY ACCOUNTS.
Footnotes to Capsule Performance Information and Table1.) Lamson Capital Management Inc. was registered as a CTA on February 28, 2008. Prior to this, the Advisor's principal, Dennis Lamson, had discretion to trade these accounts as an Associated Person for Geyser Futures, Inc. All accounts in the capsule were traded by Mr. Lamson using the same methodology as described in the document. 2.) "Worst monthly percentage draw-down" is the largest monthly loss experienced by all accounts included in the capsule in any calendar month expressed as a percentage of total equity and includes the month and year of such draw-down. 3.) "Worst peak-to-valley draw-down" is the greatest cumulative percentage decline in month-end net asset value of all accounts reflected in the capsule during a period in which the initial month-end net asset value of the account is not equaled or exceeded by a subsequent month-end net asset value of the account and includes the time period in which it occurred. 4.) Performance has been calculated on a pro forma basis. The accounts have been adjusted for the fees listed on pages 2-5 of the Document.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
Footnotes to Capsule Performance Information and Table1.) Lamson Capital Management Inc. was registered as a CTA on February 28, 2008. Prior to this, the Advisor's principal, Dennis Lamson, had discretion to trade these accounts as an Associated Person for Geyser Futures, Inc. All accounts in the capsule were traded by Mr. Lamson using the same methodology as described in the document. 2.) The Aggressive Diversified Growth Program uses the exact same proprietary indicator as the Diversified Growth Program except that it uses more leverage and occasionally selects more aggressive trades. The Advisor stopped trading the program in 2006 but has reinstated it for investors willing to assume higher risk for the potential of higher returns. The program applies only to accounts traded by Dennis Lamson as an Associated Person of Geyser. 3.) "Worst monthly percentage draw-down" is the largest monthly loss experienced by all accounts included in the capsule in any calendar month expressed as a percentage of total equity and includes the month and year of such draw-down. 4.) "Worst peak-to-valley draw-down" is the greatest cumulative percentage decline in month-end net asset value of all accounts reflected in the capsule during a period in which the initial month-end net asset value of the account is not equaled or exceeded by a subsequent month-end net asset value of the account and includes the time period in which it occurred. 5.) Performance has been calculated on a pro forma basis. The accounts have been adjusted for the fees listed on pages 2-5 of the Document.
PAST
PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS
TAX ASPECTS
The laws relating to the taxation of trading commodity interests are complex. There are various federal and state tax consequences associated with trading commodity interests.
Under the Internal Revenue Code, expenses of producing income, including investment advisory fees, are aggregated with unreimbursed employee business expenses and other expenses of producing income (collectively, "Aggregate Investment Expenses"). The aggregate amount of those expenses is deductible only if such amount exceeds 2% of a non-corporate taxpayer's adjusted gross income. The fees payable to the Advisor may be characterized as investment advisory fees. In addition, Aggregate Investment Expenses in excess of the 2% threshold, when combined with certain itemized deductions, are subject to a reduction equal to, generally 3% of the taxpayer's adjusted gross income in excess of certain threshold amounts. Moreover, such Aggregate Investment Expenses are miscellaneous itemized deductions that are not deductible by a non-corporate taxpayer calculating his alternative minimum tax liability. Accordingly, the fees paid to the Advisor by a participating client who is a U.S. citizen or resident will be deductible only to the extent that such participating client's Aggregate Investment Expenses exceed 2% of such client's adjusted gross income. EACH CLIENT, THEREFORE, MAY PAY TAX ON MORE THAN THE NET PROFITS GENERATED BY THE ADVISOR'S MANAGED ACCOUNT PROGRAM.
PROSPECTIVE CLIENTS SHOULD CONSULT WITH THEIR OWN TAX ADVISERS BEFORE DECIDING WHETHER TO OPEN AN ACCOUNT WITH THE ADVISOR.
ADDITIONAL INFORMATION
Additional information about the Advisor and its trading program can be obtained by contacting the Advisor at the address or telephone number appearing on page 1 of this Disclosure Document.
ACKNOWLEDGMENT OF RECEIPT OF DISCLOSURE DOCUMENT
The following Client(s) or entity, hereby acknowledges receipt of the Disclosure Document of Lamson Capital Management Inc. dated March 31, 2008.
1. NAME OF CLIENT_________________________________________ (please print)
SIGNATURE______________________________________________
DATE OF SIGNATURE_____________________________________
2. NAME OF CLIENT_________________________________________ (please print)
SIGNATURE______________________________________________
DATE OF SIGNATURE_____________________________________
3. NAME OF CLIENT_________________________________________ (please print)
SIGNATURE______________________________________________
DATE OF SIGNATURE_____________________________________
LAMSON CAPITAL MANAGEMENT, INC. SUBSCRIPTION DOCUMENT
INSTRUCTIONS FOR OPENING AN ACCOUNT 1. Complete these required forms (check when completed): ___ Investment Management Agreement (Exhibit 1) ___ Client Information Questionnaire (Exhibit 2) ___ Trading Authorization (Exhibit 3) ___ Fee Payment Authorization (Exhibit 4) 2. Open an account with the Futures Commission Merchant where your account will be carried, and an introducing broker (IB) if you so elect. 3. If desired, complete the optional Special Disclosure for Notionally Funded Accounts (Exhibit 5). 4. Complete, date and sign the account application from the Futures Commission Merchant, including trading authorization ("power of attorney") form. 5. Issue a check payable to the Futures Commission Merchant. 6. Return completed forms to: Lamson Capital Management, Inc. 1130 Grouse Ridge Dr. Central Point, OR 97502 7. Keep the Disclosure Document and exhibits for your records.
EXHIBIT 1
Lamson Capital Management, Inc (LMC) 1130 Grouse Ridge Dr., Central Point, OR 97502 E-Mail: DRLamson@charter.net Investment Management Agreement Agreement, dated as of ______, 200_, between LCM (the "Manager") and _____________________ (the "Client"). In consideration of the mutual covenants contained herein, and for other valuable consideration, the parties hereto agree as follows: 1. Appointment of Manager. The Client shall open an investment account (the "Account") with ____________________________ (the "Broker"), with an initial deposit of $__________. The Client wishes to have these funds invested in the ____Diversified Growth Program ____ Aggressive Diversified Growth Program. The Client hereby appoints the Manager as discretionary investment manager with respect to the assets placed at the direction of Client in the investment program described in the Manager's Disclosure Document under the Manager's supervision (such program being referred to herein as the "Investment Program" and the assets managed pursuant thereto being referred to herein as an "Account"), and the Manager hereby accepts such appointment, effective as of the date hereof, pursuant to the provisions of this Agreement. 2. Description of Account; Addition or Withdrawal of Funds. An Account shall consist of such cash, stocks, bonds, options and other derivative instruments and other securities and financial instruments which, from time to time, the Client places in an Account for investment pursuant to the Investment Program and/or which shall become part of an Account as a result of trading in respect thereof or otherwise. The Client may make additions to, and withdrawals from, any Account in such amounts as the Client shall determine, provided that (a) with respect to additions, the Manager shall have received prior written notice thereof, and (b) with respect to withdrawals, (i) the Account is subject to a three (3) month "lock-up" period whereby the Account will be prohibited from redeeming monies in the Investment Program until the expiration of three (3) full calendar months proceeding the date of the initial investment, (ii) the Manager shall have received not less than fifteen (15) business days' prior written notice prior to any planned withdrawals, and (iii) the Client may not withdraw funds from the Account (unless he intends to terminate this Agreement) if to do so would cause the balance in the Account to fall below a level such that the Manager believes that the Account should no longer be traded. FCI may, in sole and absolute discretion, permit an account to withdraw capital prior to meeting the lock-up period set forth in this item 2 (b)(i). 3. Powers of Manager. The Manager shall have full discretion and authority, without obtaining any prior approval from the Client, as the Client's agent and attorney-in-fact, and at the Client's expense, (i) to make all investment decisions in respect of each Account; (ii) to buy on margin or otherwise, sell (including short sales), lend securities, engage in repurchase and reverse repurchase transactions, swap transactions and transactions in a variety of options, securities and other instruments in respect of the Account (to the extent consistent with the Investment Program); (iii) to place orders with respect to, and to arrange for, any of the foregoing; (iv) to make investment representations on behalf of the Client; and (v) in furtherance of the foregoing, to do anything which the Manager shall deem requisite, appropriate or advisable in connection therewith, including, without limitation, the selection of such brokers, dealers and others as the Manager shall determine. 4. Fees. In consideration of and in compensation for the advisory services to be rendered by Manager to the Account under this Agreement, Client agrees that Adviser will be paid the fees set forth on Schedule A attached hereto, which schedule is incorporated herein by reference and made a part hereof. Management and incentive fees are paid directly to the Manager out of the Client's Account, unless the Manager and Client have made a different arrangement. The Broker and the Manager are authorized by the Client to deduct the fees directly from the Client's Account. The assets, liabilities and performance attributable to one Account shall not impact the calculation of the assets, liabilities or performance attributable to any other Account. Unless otherwise agreed to in writing, all fractional dollar amounts of any fees are rounded to the nearest dollar. 5. Expenses. The Manager will be reimbursed for all out of pocket expenses be paid to third parties involving any Investment Program, including (i) custodial, appraisal, legal and other professional fees; (ii) brokerage commissions, give-up fees, issue and transfer taxes and other costs of securities transactions to which the Client is a party and (iii) taxes, if any, be paid by the Client. 6. Responsibility of Executing Brokers. Client recognizes that the Manager will transmit orders on his behalf to an executing broker. The Manager's responsibilities with respect to any of Client's transactions shall be fulfilled at the time that a complete order has been transmitted to the executing broker. The Manager shall not be responsible for any acts, omissions, or errors of the executing broker in executing such orders. The Broker will furnish Client with confirmations of all transactions executed in the Account, monthly statements showing information concerning trading activities in the Account and other account statements customarily furnished by the Broker to customers. Client authorizes the Broker to forward to the Manager copies of any confirmations, statements, or reports sent by Broker to Client. Client understands that Broker, rather than the Manager, will have full custody of Client's funds and investment positions. Client acknowledges that in order to provide for more efficient execution of orders for the Account, the Manager may place orders for execution through one broker, which will later be "given up" by the executing broker to the Broker. Client agrees to pay all "give up" fees. 7. Client's Representations and Warranties. The Client represents, warrants, and agrees that: (a) The Client has received, read and understood and carefully considered the risks outlined in the Disclosure Document for Manager, dated March 31, 2008, of Manager and that no person is authorized by Manager to make statements in addition to, or inconsistent with, those contained in such Disclosure Document. (b) The retention of the Manager by the Client as investment manager with respect to the investment of all properties held in the Account is authorized by the governing documents of the Client relating to the Account. (c) The execution, delivery and performance of this Agreement do not violate any obligation by which the Client or its property is bound, whether arising by contract, operation of law or otherwise. (d) If the Client is a corporation or limited liability entity, this Agreement has been duly authorized by appropriate action and when executed and delivered will be a legal, valid and binding agreement of the Client, enforceable against the Client in accordance with its terms, and the Client will deliver to the Manager such evidence of such authority as the Manager may reasonably require, whether by way of a certified resolution or otherwise. (e) This Agreement constitutes an arms-length agreement between the Client and the Manager. The Client understands the method of compensation provided for herein and its risks. (f) The Client has such knowledge and experience in financial and business matters that the Client is capable of evaluating the merits and risks of the Client's investment and is able to bear such risks, and has obtained, in the Client's judgment, sufficient information from the Manager to evaluate the merits and risks of such investment. The Client has evaluated the risks of investing and determined that its investment is suitable for the Client. The Client can afford a complete loss of the investment. (g) The Client represents that (a) it is not an individual, entity or organization identified on any Office of Foreign Assets Control ("OFAC") "watch list" and does not have any affiliation of any kind with such an individual, entity or organization; (b) it is not a foreign shell bank; and (c) it is not a person or entity resident in or whose subscription funds are transferred from or through a jurisdiction identified as non-cooperative by the Financial Action Task Force (the "FATF"). (h) The Client represents that it is not a senior foreign political figure, 1. an immediate family member of a senior foreign political figure, or 2. a close associate of a senior foreign political figure3. 1 A "senior foreign political figure" is defined as a senior official in the executive, legislative, administrative, military or judicial branches of a foreign government (whether elected or not), a senior official of a major foreign political party, or a senior executive of a foreign government-owned corporation. In addition, a "senior foreign political figure" includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure. 2 "Immediate family" of a senior foreign political figure typically includes the figure's parents, siblings, spouse, children and in-laws. 3 A "close associate" of a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure. Ex 1- 3 (i) The Client represents that the source of funds to be invested in the Account was not derived from activities that may contravene federal, state or international anti-money laundering laws and regulations. (j) The Client agrees to provide any information deemed necessary by the Manager in its sole discretion to comply with its anti-money laundering program and related responsibilities from time to time. (k) The Client shall hold the Manager harmless from and indemnify the Manager against any and all liability or loss which the Manager may incur or suffer if and to the extent that such liability or loss was caused by the inaccuracy or breach by the Client of any of the provisions set forth in paragraphs 7(a) through (i) hereof. (l) The foregoing representations and warranties shall be continuing during the term of this Agreement, and if at any time during the term of this Agreement any event has occurred which would make any of the foregoing representations and warranties untrue or inaccurate in any material respect, the Client promptly will notify the Manager of such event and the parts related thereto. 8. Manager's Representations and Warranties. Manager represents and Client acknowledges that the Manager is currently registered with the Commodity Futures Trading Commission as a commodity trading adviser and is a Member of the National Futures Association. 9. Conflicts of Interest. It is understood that the Manager performs investment advisory services for various clients other than the Client. The Client agrees that the Manager may give advice and take action in the performance of its duties with respect to any of its other clients which may differ from advice given, or the time or nature of action taken, with respect to the Account, so long as it is LCM's policy, to the extent practical, to allocate investment opportunities to the Account over a period of time on a fair and equitable basis relative to other clients. Nothing in this Agreement shall be deemed to impose upon the Manager any obligation to purchase or sell for the Account any security or property which the Manager, its principal, affiliates or employees may purchase or sell for its or their own accounts or for the account of any other client. 10. Responsibility for Non-Managed Funds. The Client agrees that the Manager shall not be under any duty with regard to any assets, securities, funds or other property held by the Client which are not part of the Account. 11. Investment Restrictions. Unless the Client notifies the Manager in advance of any investment restrictions it wishes to impose in connection with the Investment Program and the Manager agrees in writing of any specific restrictions, the investments recommended for, or made on behalf of, an Account shall be deemed not to be restricted by virtue of the terms of any other contract or instrument purporting to bind the Client or the Manager. Any such restrictions now in effect shall be attached to this Agreement. 12. Exculpation and Indemnification. The Manager shall use its best efforts to increase the value of the Account; however, the Manager cannot and does not insure any such increase. Except for gross negligence, willful misconduct or bad faith, neither the Manager nor any of its directors, officers, affiliates, principal, employees or agents shall be liable hereunder or otherwise for any action performed or omitted to be performed or for any errors of judgment in managing the Account. The Client shall indemnify the Manager (and its officers, directors, principal, employees and agents) against any expense, loss, liability or damage arising out of any claim asserted, or threatened to be asserted by any third party, including attorney's fees as incurred, with respect to the matters as to which the Manager is exculpated from liability as set forth above 13. Confidentiality of Information. Consistent with the Manager's privacy policy, the Manager shall not disclose information relating to the Client's affairs except in the ordinary course of effecting transactions for an Account and as may be required by law. As a condition to the delivery to the Client of monthly account statements describing the securities held in the Account, the Client agrees, and if the Client is a corporation or limited liability entity the Client agrees to cause its officers, employees, agents and advisors (collectively, "Representatives"), to treat confidentially such information and any other information obtained from the Manager with respect to the Manager's investment strategy, objectives and guidelines, together with any analyses, studies or other documents prepared by the Client or its Representatives which contain or otherwise reflect or are generated from such information. 14. Notices. Any notices required to be given hereunder shall be in writing and sent by certified or registered mail, return receipt requested, to the Manager and to the Client at the addresses set forth below their respective signatures hereto. Either party may change its address by giving notice in writing to the other party stating such new address. Commencing on the tenth day after the giving of such notice, such newly designated address shall be the party's address for the purpose of all notices or communications required or permitted to be given pursuant to this Agreement. Notices to the Client from the Manager shall be deemed given as of the close of business on the first business day after mailing. Notices to the Manager from the Client shall be deemed given as of the close of business on the day on which such notices are received by the Manager. The Manager may rely upon any notice (written or oral) from any person reasonably believed by it to be genuine and authorized. 15. Termination. This Agreement shall terminate upon the Manager or the Client receiving from the other written notice of termination, effective fifteen (15) business days' after such notice. Such termination shall be without liability of any party to the other, except that incentive fees shall be calculated (and, if due, paid) as if the termination date of the Account were the end of the calendar month, and the Client shall remain liable for any accrued but unpaid compensation due to the Manager under paragraph 4 hereof 16. Governing Law; Conferral of Jurisdiction. This Agreement shall be construed in accordance with, and governed by, the laws of the State of Oregon, without giving effect to its conflicts of law principles. Accordingly, the parties: (a) agree to service of process in any legal proceeding by sending copies thereof by (i) a recognized overnight courier service (e.g., Fedex, UPS or DHL) or (ii) by registered or certified mail, if practicable (postage prepaid) to the other party at the address set forth in this Agreement or updated as provided in item 14 hereof, and (b) consent and submit to the exclusive jurisdiction of the federal and state courts located within either Jackson County, Oregon, and further agree that any action or proceeding brought by either party to enforce any fight, assert any claim or obtain any relief whatsoever in connection with this Agreement shall be commenced by such party exclusively in the federal or state courts, or if appropriate, before an arbitral body, located within such counties and state. Each of the parties hereto hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement or the transactions contemplated hereby. In no event shall either party be liable to the other party for any special, incidental, or punitive damages caused on any theory of liability arising in any way out of this Agreement. 17. Entire Agreement. This Agreement shall constitute the entire agreement between the Manager and the Client with respect to the subject matter hereof and shall supersede any and all prior agreements and understandings, whether written or verbal and cannot be changed except by a written instrument signed by each of the parties hereto. 18. Assignment; Binding Effect. This Agreement may not be assigned (as that term is defined in the Investment Advisers Act of 1940) by either party without the prior written consent of the other. Subject to the foregoing sentence, this Agreement shall be binding upon and inure to the benefit of each party's respective successors and permitted assigns. 19. Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. 20. Severability. If any provision of this Agreement is invalid or unenforceable, the balance of the Agreement shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances.
21. Headings. The headings contained in this Agreement are intended solely for convenience and shall not affect the rights of the parties to this Agreement. 22. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall be deemed one and the same instrument. 23. English as Principal Language. This Agreement has been written in the English language and, in the event of any conflict or inconsistency between the English language version and any translation hereof the English language version shall prevail. If the foregoing correctly sets forth our understanding, please sign and return to the Manager the enclosed copy of this letter. LAMSON CAPITAL MANAGEMENT, INC. (LCM) 1130 Grouse Ridge Dr. Central Point, OR 97502 By: __________________________________ Name: __________________________________ Title: __________________________________ Name of Client: __________________________________ Address: __________________________________ Email: __________________________________ By: __________________________ By: _________________________________ Name: __________________________ Name: _________________________________ Title: __________________________ Title: _________________________________ Schedule A Investment Fees and Allocations for Investment Programs 1. As compensation for its advisory services, the Manager will receive: (a) A monthly, non-refundable management fee of 1/12 of 1% of the Net Assets of the client's account which shall be prepaid prior to the commencement of trading at each calendar month [the "Management Fee(s)"]. Net Assets shall mean an account's total assets, including any notional equity declared, less total liabilities. Net Assets will include the sum of all cash and any unrealized profit or loss on securities and open commodity positions. All securities and open commodity positions shall be valued at their then market value which means, with respect to open commodity positions, the settlement price determined by the exchanges on which such positions are maintained. If there are no trades on the date of the calculation due to the operation of the daily price fluctuation limits or due to closing of the exchange on which positions are maintained, the contract will be valued at the settlement price as determined by the exchange on the first subsequent day on which the position could be liquidated. (b) A monthly fee based on the profitability of LCM's trading for the client's account. Such fee is 20% of Net Trading Profits [the "Incentive Fee(s)"]. Net Trading Profits is equal to the excess of an account's Net Assets at the end of the calendar month over its Net Assets at the end of the highest previous month or its Net Assets at the date trading commences, whichever is higher - i.e., the "high-water mark," and as further adjusted to eliminate the effect on the account's Net Assets resulting from new capital contributions or capital withdrawals, if any, made during the period, whether the assets are held separately or in a margin account. Losses attributable to capital withdrawals shall not be carried forward. Net Trading Profits shall be net of all accrued or payable brokerage commissions, fees and other expenses and shall include interest or other income not directly related to trading activity. The Incentive Fees calculation also includes, in part, unrealized appreciation on open positions. Such appreciation may never be realized by a client. For example, if at the end of a month the client's account had unrealized profits on open positions, LCM may receive an Incentive Fee based on such unrealized profits. Following such payments, those open positions might, due to adverse market conditions, be closed out at no profit or a loss; nevertheless if a client's account incurs a loss after an Incentive Fee has been paid, such Incentive Fee will not be rebated and LCM will retain the fee, but no further Incentive Fee will be made in subsequent months until the account again has Net Trading Profits. If an account closes out before the end of a month, the closing date will be deemed the end of the month for purposes of calculating such Incentive Fee. 2. Valuation of an Account shall be determined in accordance with Generally Accepted Accounting Principles. Without limitation, the definition shall include the following significant accounting policies, all of which are consistent with the aforementioned principles: (a) "Market Value" of a securities interest traded on an exchange shall be its closing price or, if applicable, the mean of its closing bid and asked prices on the date of determination. If the exchange on which a securities interest is required to be valued is closed, or if a securities interest is not traded on such exchange, or if a securities interest did not trade on such exchange on the date of determination, such securities interest shall be valued as if the date of determination were the last previous date on which such exchange was open, or on which such securities interest traded on such exchange. In the absence of a readily ascertainable closing price or bid and asked price, the Market Value of a securities interest shall mean its Market Value as determined by the Manager on a basis consistently applied. (b) "Market Value" of a commodity interest traded on a United States commodity exchange shall be based upon the settlement price on the commodity exchange on which the particular commodity interest is traded, provided that, if a commodity interest could not, in the judgment of the Manager be liquidated on the day with respect to which any determination is being made due to the operation of daily limits or other rules of the commodity exchange upon which that commodity interest is traded or otherwise, the settlement price on the first subsequent day on which the commodity interest could be liquidated shall be the basis for determining the Market Value of such commodity interest for such day, or such other value as the Manager may deem fair and reasonable. The Market Value of a commodity interest not traded on a United States commodity exchange shall mean its Market Value as determined by the Manager on a basis consistently applied for each different variety of commodity interest, provided that, if a contract could not be liquidated on the day with respect to which Management Fees and Incentive Fees are being determined, the basis for determining the Market Value of such contract shall be such value as the Manager may deem fair and reasonable.
EXHIBIT 2
CLIENT INFORMATION QUESTIONNAIRE As part of its due diligence process, LAMSON CAPITAL MANAGEMENT, Inc. requires certain information about individually managed account clients. Please assist us by providing the information requested below. If, you, the client chooses to keep certain items confidential, please mark those items, sign and date the form.
ACCOUNT INFORMATION (PLEASE PRINT OR TYPE) Type of Account (select one) Individual
Joint Tenancy With Rights Of Survivorship
Tenants in Common
General Partnership
Limited Partnership
Corporate
Trust NOTE: For all types of accounts listed above, except Individual accounts, please attach agreement, amendment, resolution or offering documents. Client Name._____________________________________________________________ Date of Birth:____________________________________________________________ Home Telephone Number: ___________________________________ Cell Phone Number: ________________________________________ Mailing Address: _________________________________________________ City/State: ___________________________ Zip Code: __________ E-mail: _______________________________________ Principal Occupation or Business/Years Employed: ________________________________________________________________________
Business Address: _______________________________________________ City/State: ___________________________ Zip Code: __________ Business Telephone Number: _______________________ Annual Gross Income for Previous Two Years: � $0-$250,000 � $500,000-$1,000,000 � $250,000-$500,000 � >$1,000,000 Estimated Annual Income for Current Year: � $0-$250,000 � $500,000-$1,000,000 � $250,000-$500,000 � >$1,000,000 Liquid Net Worth: � $0-$500,000 � $1,000,000-$5,000,000 � $500,000-$1,000,000 � >$10,000,000 � $5,000,000-$10,000,000 Bank Reference: ___________________________________________________ Previous Investment Experience: Stocks/Bonds � 0-3 yrs � 3-5 yrs � 5-10 yrs � >10 yrs Funds � 0-3 yrs � 3-5 yrs � 5-10 yrs � >10 yrs Options � 0-3 yrs � 3-5 yrs � 5-10 yrs � >10 yrs Commodity Futures � 0-3 yrs � 3-5 yrs � 5-10 yrs � >10 yrs Limited Partnerships � 0-3 yrs � 3-5 yrs � 5-10 yrs Please describe any previous futures investment experience in some detail: _____________________________________________________________________ Joint Account Holder: Client Name:________________________________________________________ Date of Birth: _______________________________________________________ Home Telephone Number: ____________________________________________ Cell Phone Number: __________________________________________________ Mailing Address: ____________________________________________________ City/State: ___________________________ Zip Code: __________ E-mail: _______________________________________ Principal Occupation or Business/Years Employed: _______________________________________________________________ Business Address: ________________________________________________ City/State: ___________________________ Zip Code: __________ Business Telephone Number: _______________________ Annual Gross Income for Previous Two Years: � $0-$250,000 � $500,000-$1,000,000 � $250,000-$500,000 � >$1,000,000 Estimated Annual Income for Current Year: � $0-$250,000 � $500,000-$1,000,000 � $250,000-$500,000 � >$1,000,000 Liquid Net Worth: � $0-$500,000 � $1,000,000-$5,000,000 � $500,000-$1,000,000 � >$10,000,000 � $5,000,000-$10,000,000 Bank Reference: ___________________________________ Previous Investment Experience: Stocks/Bonds � 0-3 yrs � 3-5 yrs � 5-10 yrs � >10 yrs Funds � 0-3 yrs � 3-5 yrs � 5-10 yrs � >10 yrs Options � 0-3 yrs � 3-5 yrs � 5-10 yrs � >10 yrs Commodity Futures � 0-3 yrs � 3-5 yrs � 5-10 yrs � >10 yrs Limited Partnerships � 0-3 yrs � 3-5 yrs � 5-10 yrs Please describe any previous futures investment experience in some detail: ______________________________________________________________ Do you understand this investment program is only suitable for risk capital? ____ Yes _____No Do you understand that your account should be considered a long-term investment? ____ Yes _____No Who has contacted you with respect to the service offered? _____________________________________________________________ Have you received a Disclosure Document? ____ Yes _____No Have you been given anything written or verbal that is contrary to what is in the Disclosure Document? ____ Yes _____No
If yes, please explain: __________________________________________________ ____________________________________________________________________ Is this account a pool? ____ Yes _____No
If yes, is it registered with the NFA or any other regulatory body? ____ Yes _____No
If yes, please give the NFA identification number of the pool and the pool operator. POOL OPERATOR_____________________________ ID # ______________
If no, is the pool operating under an exemption and, if so, please explain. ___________________________________________________________________________________ __________________________________________________________
Are you wiring money into your account from a non-U.S. financial institution? ____ Yes _____No
If yes, please provide the address of the foreign bank / financial institution from which the funds will be arriving: ______________________________________________________________________________________
Client represents that all evidence of identity provided is genuine and all related information furnished is accurate.
LAMSON CAPITAL MANAGEMENT, INC. (LCM) 1130 Grouse Ridge Dr. Central Point, OR 97502
By: __________________________________ Name: __________________________________ Title: __________________________________ Name of Client: __________________________________ Address: __________________________________ Email: __________________________________ By: __________________________ By: _________________________________ Name: __________________________ Name: _________________________________
EXHIBIT 3
TRADING AUTHORIZATION
LAMSON CAPITAL MANAGEMENT, INC. 1130 Grouse Ridge Dr. Central Point, OR 97502 541-664-3509 E-Mail: drlamson@charter.net
[Name of Client], does hereby appoint LAMSON CAPITAL MANAGEMENT, INC. (LCM) with full power and authority as attorney-in-fact to buy and sell, on behalf of the Client's account carried at [Name of FCM] Commodity Interests, including, but not limited to, options on commodities, as well as other related various securities and related instruments, and any rights pertaining thereto, pursuant to the trading program designated in that certain Investment Management Agreement among LAMSON CAPITAL MANAGEMENT, ICN (LCM) and the Client through the FCM. This authorization shall terminate and be null, void and of no further effect immediately upon the earlier of (i) notice from LAMSON CAPITAL MANAGEMENT, INC. (LCM) pursuant to the terms of the said Investment Management Agreement or (ii) the termination of the said Investment Management Agreement by the Client.
LAMSON CAPITAL MANAGEMENT, INC. (LCM) 1130 Grouse Ridge Dr. Central Point, OR 97502
By: __________________________________ Name: __________________________________ Title: __________________________________ Name of Client: __________________________________ Address: __________________________________ Email: __________________________________ By: __________________________ By: _________________________________ Name: __________________________ Name: _________________________________ Title: __________________________ Title: _________________________________
EXHIBIT 4 FEE PAYMENT AUTHORIZATION From: Client Name: Account Number: To: ______________________ [Name of FCM] Subject to the provisions of the Investment Management Agreement of LAMSON CAPITAL MANAGEMENT, INC (LCM) and [Name of Client], which the Client has executed, you are hereby authorized to deduct and remit directly to LCM such management fees and Incentive Fees as LCM requests. LCM will inform you of the exact amounts due on the agreed upon payment dates. The Client acknowledges and agrees that LCM is solely responsible for the computation of management fees and Incentive Fees and authorizes you to rely conclusively on remittance instructions submitted by LCM with respect to the amount and payment of management fees and Incentive Fees without further inquiry. It is understood that you shall not be required to pay funds as a result of LCM's instructions if there are not sufficient funds in the account of the Client. You shall be indemnified and held harmless by the Client and LCM from any loss suffered or liability incurred by reason of any act or omission made in compliance with the authorization contained herein, unless such loss or liability was the result of your gross negligence or intentional misconduct. This authorization will continue in effect until you have received written notice terminating it from the Client. Such notice will be mailed to LCM. Any notices required to be given hereunder shall be in writing and sent by certified or registered mail, return receipt requested. (PLEASE PRINT IN FULL)
LAMSON CAPITAL MANAGEMENT, INC. (LCM) 1130 Grouse Ridge Dr. Central Point, OR 97502
By: __________________________________ Name: __________________________________ Title: __________________________________ Name of Client: __________________________________ Address: __________________________________ Email: __________________________________ By: __________________________ By: _________________________________ Name: __________________________ Name: _________________________________ Title: __________________________ Title: _________________________________ EXHIBIT 5
ADDITIONAL DEPOSIT REQUEST To Be Completed By Existing Clients
LAMSON CAPITAL MANAGEMENT, INC (LCM) 1130 Grouse Ridge Dr. Central Point, OR 97502 Email: drlamson@charter.net
Gentlemen: I hereby irrevocably submit an additional deposit to my LCM account in the amount of: $_________________. The undersigned hereby deposits the additional amount set forth above upon the terms and conditions described in the Disclosure Document and Investment Management Agreement. The undersigned restates all of the covenants, representations and warranties made in the undersigned's original Investment Management Agreement as if they were made on the date hereof and certifies that all of the financial information set forth in the undersigned's original Investment Management Agreement remains accurate and complete on the date hereof.
LAMSON CAPITAL MANAGEMENT, INC. (LCM) 1130 Grouse Ridge Dr. Central Point, OR 97502
By: __________________________________ Name: __________________________________ Title: __________________________________ Name of Client: __________________________________ Address: __________________________________ Email: __________________________________ By: __________________________ By: _________________________________ Name: __________________________ Name: _________________________________ Title: __________________________ Title: _________________________________
EXHIBIT 6
WITHDRAWAL REQUEST
Gentlemen: I hereby request a withdrawal of all or a portion of my Account with LAMSON CAPITAL MANAGEMENT, INC. (LCM), in accordance with the instructions provided below:
I understand that my Account is subject to a three (3) month "lock-up" period whereby the Account will be prohibited from redeeming monies in the Investment Program until the expiration of three (3) full calendar months proceeding the date of the initial investment. In addition, I understand that the Manager must receive no less than fifteen (15) days prior written notice of this planned withdrawal. Finally, I understand I may not withdraw funds from the Account, unless I intend to terminate the Investment Management Agreement, if to do so would cause the balance in my Account to fall below a level such that the Manager believes my Account should no longer be traded.
I hereby represent and warrant, in my individual capacity or as an authorized representative of a trust, partnership or corporation, that I am the true and lawful owner of the Account to which this request relates, with full power and authority to request a withdrawal of funds from the Account. I further represent and warrant that the Account in respect of which a withdrawal is herein requested is not subject to any pledge or other encumbrance.
As of the date set forth opposite my signature below, I request a withdrawal of $_______________________.
Proceeds in respect of this withdrawal are to be sent to me by check drawn in U.S. dollars unless instructions for a bank wire transfer are provided, as follows:
(Name of bank) (ABA/Swift Number of bank) (Name, City, Country and branch of bank) (Account number) I have executed this request for withdrawal on ___________ , 200__
LAMSON CAPITAL MANAGEMENT, INC. (LCM) 1130 Grouse Ridge Dr. Central Point, OR 97502
By: __________________________________ Name: __________________________________ Title: __________________________________ Name of Client: __________________________________ Address: __________________________________ Email: __________________________________ By: __________________________ By: _________________________________ Name: __________________________ Name: _________________________________ Title: __________________________ Title: _________________________________ EXHIBIT 7
SPECIAL DISCLOSURE FOR NOTIONALLY-FUNDED ACCOUNTS
You should request your commodity trading advisor to advise you of the amount of cash or other assets ("Actual Funds") which should be deposited to the advisor's trading program for your account to be considered "Fully-Funded". "Actual Funds" means the equity in a commodity trading account over which a CTA has trading authority and funds that can be transferred to that account without the client's consent to each transfer.
You are reminded that the account size you have agreed to in writing (the "Nominal Account Size") is not the maximum possible loss that your account may experience. "Nominal Account Size" means the account size agreed to by the client that establishes the level of trading in the particular trading program. This is the amount upon which the commodity trading advisor will determine the number of contracts traded in your account and should be an amount sufficient to make it unlikely that any further cash deposits would be required from you over the course of your participation in the commodity trading advisor's program.
You should consult the account statements received from your futures commission merchant in order to determine the actual activity in your account, including profits, losses and current cash equity balance. To the extent that the equity in your account is at any time less than the nominal account size you should be aware of the following:
1. Although your gains and losses, fees and commissions measured in dollars will be the same, they will be greater when expressed as a percentage of account equity.
2. You may receive more frequent and larger margin calls.
* * * I have read and understood the above statement relating to my partially funded account. I understand that my account will be traded pursuant to the Program offered by LAMSON CAPITAL MANAGEMENT, INC. (LCM) (the "Advisor"). My account will be opened with a $______________ deposit by me into a trading account held by my futures commission merchant. My account will be traded as though it had been fully funded with $_______________ and, therefore, will be funded only as to ____% of its nominal account size. The difference between my deposit and the nominal account size shall represent "notional funds."
I also understand that my account will generally be traded with a margin-to-equity ratio that may average ____% of the account if fully funded (equal to a ____% margin-to-equity ratio because of my partial funding).
For purposes of calculating the fees owed to the Advisor, the nominal account size (i.e., actual funds plus notional funds) shall represent the "initial equity" in the account. I understand that the nominal account size will stay constant unless I provide instruction in writing to the contrary. Any additions to my account after the initial deposit shall be treated as an addition to the actual funds in the account and shall be subtracted from the notional funds. Any withdrawals from my account shall be treated as a withdrawal of actual funds and shall be added to the notional funds. I understand that, because my account is not fully funded, profits and losses will be larger as a percentage of actual account size and margin calls, if any, will be greater, when compared to accounts that are fully funded. I further understand that net performance will not effect the nominal account size.
IN WITNESS WHEREOF, the parties have caused this Special Disclosure for Notionally-Funded Accounts to be duly executed as of the _____day of ______________200__.
LAMSON CAPITAL MANAGEMENT, INC. (LCM) 1130 Grouse Ridge Dr. Central Point, OR 97502
By: __________________________________ Name: __________________________________ Title: __________________________________ Name of Client: __________________________________ Address: __________________________________ Email: __________________________________ By: __________________________ By: _________________________________ Name: __________________________ Name: _________________________________ Title: __________________________ Title: _________________________________
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