<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)
Blue Ridge Real Estate Company and Big Boulder Corporation
----------------------------------------------------------
(Name of Issuer)
Common Stock, without par value, $0.30 stated par value per combined share
--------------------------------------------------------------------------
(Title of Class of Securities)
096005 4 20 2 (common); 096004 4 10 3 (unit)
--------------------------------------------
(CUSIP Number)
Klehr, Harrison, Harvey, Branzburg & Ellers
Attn: Jason M. Shargel
1401 Walnut Street
Philadelphia, PA 19102
(215) 568-6060
-------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 1, 1995(1)
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement /X/. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
(Continued on following page(s))
Page 1 of 41
- --------
1 On such date, the Acquisition (as described in Item 5) occurred which may
be construed to result in the formation of a group consisting of each of the
entities filing this Report. For the dates of other transactions described in
this Report, see Item 5.
<PAGE>
- -------------------------------------------------------------------------------
CUSIP No. 096005-4-20-2
096004-4-10-3 13D 2
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Rea Brothers Group PLC
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
England
- ------------------------------------------------------------------------------
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | | 0
BENEFICIALLY | |
OWNED BY | 8 | SHARED VOTING POWER
EACH | | 0
REPORTING | 9 | SOLE DISPOSITIVE POWER
PERSON WITH | | 0
| 10 | SHARED DISPOSITIVE POWER
| | 371,386
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
371,386
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.5%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO/HC
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
- -------------------------------------------------------------------------------
CUSIP No. 096005-4-20-2
096004-4-10-3 13D 3
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Finsbury Asset Management Limited
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
England
- ------------------------------------------------------------------------------
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | | 0
BENEFICIALLY | |
OWNED BY | 8 | SHARED VOTING POWER
EACH | | 0
REPORTING | 9 | SOLE DISPOSITIVE POWER
PERSON WITH | | 0
| 10 | SHARED DISPOSITIVE POWER
| | 134,000
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
134,000
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.7%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO/IA
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
- -------------------------------------------------------------------------------
CUSIP No. 096005-4-20-2
096004-4-10-3 13D 4
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Finsbury Trust PLC
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
England and Wales
- ------------------------------------------------------------------------------
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | | 61,000
BENEFICIALLY | |
OWNED BY | 8 | SHARED VOTING POWER
EACH | | 0
REPORTING | 9 | SOLE DISPOSITIVE POWER
PERSON WITH | | 0
| 10 | SHARED DISPOSITIVE POWER
| | 61,000
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
61,000
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.0%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO/IC
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
- -------------------------------------------------------------------------------
CUSIP No. 096005-4-20-2
096004-4-10-3 13D 5
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ocean Wilsons (Investments) Limited
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
BERMUDA
- ------------------------------------------------------------------------------
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | | 30,000
BENEFICIALLY | |
OWNED BY | 8 | SHARED VOTING POWER
EACH | | 0
REPORTING | 9 | SOLE DISPOSITIVE POWER
PERSON WITH | | 0
| 10 | SHARED DISPOSITIVE POWER
| | 30,000
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
30,000
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.5%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO/IC
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
- -------------------------------------------------------------------------------
CUSIP No. 096005-4-20-2
096004-4-10-3 13D 6
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Finsbury Growth Trust PLC
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Scotland
- ------------------------------------------------------------------------------
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | | 27,000
BENEFICIALLY | |
OWNED BY | 8 | SHARED VOTING POWER
EACH | | 0
REPORTING | 9 | SOLE DISPOSITIVE POWER
PERSON WITH | | 0
| 10 | SHARED DISPOSITIVE POWER
| | 27,000
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
27,000
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.3%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO/IC
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
- -------------------------------------------------------------------------------
CUSIP No. 096005-4-20-2
096004-4-10-3 13D 7
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Finsbury Smaller Companies Trust PLC
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
England and Wales
- ------------------------------------------------------------------------------
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | | 16,000
BENEFICIALLY | |
OWNED BY | 8 | SHARED VOTING POWER
EACH | | 0
REPORTING | 9 | SOLE DISPOSITIVE POWER
PERSON WITH | | 0
| 10 | SHARED DISPOSITIVE POWER
| | 16,000
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,000
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.8%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO/IC
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
- -------------------------------------------------------------------------------
CUSIP No. 096005-4-20-2
096004-4-10-3 13D 8
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Reamann Trust Company Limited
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Isle of Man
- ------------------------------------------------------------------------------
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | | 90,000
BENEFICIALLY | |
OWNED BY | 8 | SHARED VOTING POWER
EACH | | 0
REPORTING | 9 | SOLE DISPOSITIVE POWER
PERSON WITH | | 90,000(2)
| 10 | SHARED DISPOSITIVE POWER
| | 0
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
90,000
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.5%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO/IA
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------
2 Due to Rea Brothers Group PLC's ownership of the entire share capital
of Reamann Trust Company Limited, the dispositive power over such shares may be
deemed to be shared with Rea Brothers Group PLC.
<PAGE>
- -------------------------------------------------------------------------------
CUSIP No. 096005-4-20-2
096004-4-10-3 13D 9
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Rea Brothers (Investment Management) Limited
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
England and Wales
- ------------------------------------------------------------------------------
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | | 0
BENEFICIALLY | |
OWNED BY | 8 | SHARED VOTING POWER
EACH | | 0
REPORTING | 9 | SOLE DISPOSITIVE POWER
PERSON WITH | | 3,934(3)
| 10 | SHARED DISPOSITIVE POWER
| | 0
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,934
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.2%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO/IA
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------
3 Due to Rea Brothers Group PLC's ownership of the entire share capital
of Rea Brothers (Investment Management) Limited, the dispositive power over
such shares may be deemed to be shared with Rea Brothers Group PLC.
<PAGE>
- -------------------------------------------------------------------------------
CUSIP No. 096005-4-20-2
096004-4-10-3 13D 10
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Rea Brothers (Guernsey) Limited
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bailiwick of Guernsey
- ------------------------------------------------------------------------------
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | | 143,452
BENEFICIALLY | |
OWNED BY | 8 | SHARED VOTING POWER
EACH | | 0
REPORTING | 9 | SOLE DISPOSITIVE POWER
PERSON WITH | | 143,452(4)
| 10 | SHARED DISPOSITIVE POWER
| | 0
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
143,452
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.2%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO/IA
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------
4 Due to Rea Brothers Group PLC's ownership of the entire share capital
of Rea Brothers (Guernsey) Limited, the dispositive power over such shares may
be deemed to be shared with Rea Brothers Group PLC.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Statement of
Reporting Persons (as defined below)
Pursuant to Section 13(d) of the
Securities Exchange Act of 1934
in respect of
BLUE RIDGE REAL ESTATE COMPANY AND
BIG BOULDER CORPORATION
This Report relates to the common stock, without par value,
stated value $0.30 per combined share (the "Shares"), of Blue Ridge Real Estate
Company and Big Boulder Corporation (collectively, the "Companies"). Such Report
is the initial filing on Schedule 13D with respect to the Shares being filed by
the group consisting of the following entities (the "Reporting Persons"):
Finsbury Asset Management Limited, formerly Finsbury Finance and Holding Company
Limited ("Finsbury"), Finsbury Trust PLC, formerly The Scottish and Mercantile
Investment Company PLC ("FTP"), Ocean Wilsons (Investments) Limited,
successor-in-interest to Ocean Wilsons (Holdings) PLC ("Ocean"), Finsbury Growth
Trust PLC, formerly Scottish Cities Investment Trust PLC ("FGT"), Finsbury
Smaller Companies Trust PLC, formerly Lancashire & London Investment Trust PLC
("FSCT," and collectively with FTP, Ocean and FGT, the "Investment Companies,"
and the Investment Companies collectively with Finsbury, the "Finsbury
Entities"), Rea Brothers Group PLC ("Rea Brothers"), Reamann Trust Company
Limited ("Trust"), Rea Brothers (Investment Management) Limited ("Investment")
and Rea Brothers (Guernsey) Limited ("RBG", and collectively with Rea Brothers,
Trust and Investment, the "Rea Entities"). This Report is being filed by the
Reporting Persons pursuant to Rule 13d-1 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). This Report also
constitutes Amendment No. 6 to the Schedule 13D (the "Finsbury Report"), dated
January 3, 1986, filed by the Finsbury Entities and Amendment No. 12 to the
Schedule 13D (the "Rea Report"), dated January 20, 1983, filed by RBG and joined
on September 29, 1989 by Investment and Trust. Each of the Reporting Persons has
agreed that this Report be filed on behalf of all such persons and such
agreement is filed as Exhibit A hereto. Pursuant to Rule 13d-2(c) promulgated
under the Exchange Act, this Report, as the first electronic amendment to the
Finsbury Report and the Rea Report, restates the applicable text of the Finsbury
Report and Rea Report.
The descriptions contained in this Report of certain
agreements and documents are qualified in their entirety by reference to the
completed text of such agreements and documents filed as Exhibits hereto and
incorporated herein by reference.
<PAGE>
The filing of this Report shall not be construed as an
admission that the Reporting Persons are a group as contemplated by Rule
13d-5(b)(1) promulgated under the Exchange Act or that any of the Reporting
Persons is the beneficial owner of any Shares covered by this Report.
Item 1. Security and Issuer
The class of equity securities which this statement relates to
is the common stock, without par value, stated value $0.30 per combined share,
of Blue Ridge Real Estate Company and Big Boulder Corporation. The principal
executive offices of the Companies are located at Blakeslee, Pennsylvania 18610.
Item 2. Identity and Background
The address of the principal place of business and principal
office of each Reporting Person comprising the Finsbury Entities other than
Ocean is Neptune House, Titon Court, 14 Finsbury Square, London EC2A 1BR,
England. The address of the principal place of business and principal office of
Ocean is Clarendon House, Church Street West, Hamilton HM DX, Bermuda. The
address of the principal place of business and principal office of each
Reporting Person comprising the Rea Entities is Alderman's House, Alderman's
Walk, London EC2M 3XR, England.
The place(s) of organization of each of the Reporting Persons
is (are) as follows:
Rea Brothers England
Finsbury England
FTP England and Wales
Ocean Bermuda
FGT Scotland
FSCT England and Wales
Trust Isle of Man
Investment England and Wales
RBG Bailiwick of Guernsey
Rea Brothers is a banking and financial services organization. Its
services consist primarily of banking, corporate finance, investment management,
offshore services (including trustee, company and third party fund
administration services) and retirement planning. Trust is an organization which
provides trustee and company administration services. Investment is an
organization which provides discretionary private and pension fund management
services. RBG is an organization which provides banking, trust and company
administration services.
Finsbury specializes in the management of United Kingdom investment
trusts. Currently Finsbury provides investment management services to, among
others, FTP, FGT and FSCT. In addition, Finsbury manages an investment portfolio
for Ocean. The entire share capital of Finsbury is currently held by Finsbury
Group Limited ("FGL"). Each of the Investment Companies is an investment trust.
The ordinary shares of each of the Investment Companies are listed and traded on
the London Stock Exchange. Some of the Investment Companies own shares in each
other as follows:
<PAGE>
(a) FTP and Ocean own 8% and 4.26%, respectively, of
FSCT's ordinary voting shares; and
(B) FTP and Ocean own 19.74% and 2.78%, respectively, of
FGT's ordinary voting shares, and 8.7% and 52.2%,
respectively, of FGT's preference shares.
In addition, FTP owns 23.56% of the ordinary voting shares of Ocean Wilsons
Holdings Limited ("OWH"), the sole stockholder of Ocean.
All the capital shares of each of Trust, Investment and RBG are owned
directly or indirectly by Rea Brothers. In addition as a result of the
Acquisition, all the capital shares of FGL, which holds all the capital shares
of Finsbury, are owned by Rea Brothers. An aggregate of approximately 24.85% of
the capital shares of Rea Brothers are held by the Investment Companies.
The Salomon 1961 Settlement Trust is a discretionary family trust
settled by the late Sir Walter and Lady Salomon in 1961 (the "1961 Settlement").
The 1961 Settlement has an indirect 11.70% interest in Rea Brothers. The 1989
Settlement Trusts (the "1989 Settlements") are four trusts settled by Lady
Salomon in 1989. William H. Salomon has an interest in possession in two of
these trusts and Carolyn A. Townsend (the sister of William H. Salomon and wife
of J. Anthony V. Townsend) has an interest in possession of two of these trusts.
The 1989 Settlements have an aggregate 5.28% interest in Rea Brothers. The
Salomon 1990 Settlements (the "1990 Settlements") are a series of sixteen trusts
settled by Lady Salomon in 1990. William H. Salomon has an interest in
possession in eight of these trusts, Carolyn A. Townsend has an interest in
possession in six of those trusts and two of the trusts are accumulation and
maintenance settlements in favor of the children of Anthony and Carolyn A.
Townsend--Christopher R. W. Townsend and Alexandra H. V. Townsend. Cumulatively,
the 1990 Settlements own 49.93% of FTP's ordinary voting shares and 21.67% of
OWH's ordinary voting shares. Half of the interests in FTP are held by trusts in
which William H. Salomon has an interest in possession and half are held by
trusts in which Carolyn A. Townsend has an interest in possession. As to OWH,
the shares are held by trusts in which William H. Salomon has an interest, as
well as trusts in which Carolyn A. Townsend has an interest in possession and
the accumulation and maintenance trusts. Four of the 1990 Settlements have an
aggregate 10.96% interest in Rea Brothers. In addition, various members of the
Salomon family own immaterial interests in FTP, Ocean, FGT, FSCT and Rea
Brothers. Neither the filing of this statement nor any of its contents shall be
construed as an admission that any member of the Salomon family, the 1961
Settlement, 1989 Settlements or 1990 Settlements beneficially own the Shares
beneficially owned by the Reporting Persons.
Affixed hereto as Appendix A is information with respect to the current
directors and executive officers of each of the Reporting Persons and certain
related persons. Certain of these persons are directors or executive officers of
more than one Reporting Person.
<PAGE>
To the best knowledge of each of the Reporting Persons, during the last
five years, no Reporting Person and no individual named in Appendix A has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (except as described immediately below) has been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
On March 2, 1983, the Securities and Exchange Commission filed a
complaint (the "SEC Complaint") in the U.S. District Court for the District of
Delaware (the "SEC Action") against Canal- Randolph Corporation ("Canal"), Rea
Brothers PLC ("Rea PLC"), a subsidiary of Rea Brothers and which at the time
acted as an investment manager to FTP (then named The Scottish and Mercantile
Investment Company), and subsequently until December 31, 1987, as investment
advisor to Finsbury in its capacity as the investment manager of FTP. The copy
of the SEC Complaint which has been previously filed as Exhibit 2 to the
Finsbury Report and Exhibit 4 to the Rea Report, respectively, is incorporated
as Exhibit B hereto by reference.
Concurrently with the filing of the SEC Complaint, solely for the
purpose of settling the SEC Action, without trial of any issue of fact or law,
and without admitting or denying the allegations of the SEC Complaint, Canal,
Rea PLC and FTP agreed to the entry of a final order by the District Court. The
copies of the final order and a related undertaking previously filed as Exhibits
3 and 4 to the Finsbury Report and Exhibits 5 and 6 to the Rea Report,
respectively, are incorporated as Exhibit C and D hereto by reference.
Item 3. Source and Amount of Funds and Other Consideration.
Rea Brothers does not hold any Shares directly. It may be deemed to
have acquired beneficial ownership of the Finsbury Entities' Shares as a result
of the Acquisition and may be deemed to be the beneficial owner of the Shares
held by Trust, Investment and RBG as a result of its direct or indirect
ownership of 100% of the capital stock of those entities. Shares held by Trust,
Investment and RBG were purchased on behalf of such Reporting Persons'
discretionary account customers for investment.
On January 3, 1986, Finsbury entered into a management agreement with
the Investment Companies and became such Reporting Persons investment manager
effective December 1, 1985. The sources of the funds used by the Investment
Companies to acquire the Shares were the working capital funds of such Reporting
Persons. The amount paid in consideration for such Shares was as follows:
<PAGE>
Reporting Person Amount of Shares Consideration
---------------- ---------------- -------------
FTP 61,000 $386,694 (A)
Ocean 30,000 $209,028
FGT 34,000 $223,360
FSCT 21,000 $138,361 (B)
------ -------
Total 146,000 $957,443
- -------------
(A) Includes 21,000 shares purchased for $109,494 (see footnote B
below) by Fashion & General Investment PLC ("Fashion") which were
distributed in specie to FTP pursuant to Fashion's placement into
members voluntary liquidation on July 11, 1990.
(B) As calculated for the filing of the original Finsbury Report, based
on a pound to dollar conversion ratio of 1.58.
Other than those Shares which may be deemed to have been purchased
as a result of the Acquisition, the Finsbury Entities have not acquired any
Shares since December 1, 1985 and the Rea Entities have not acquired any Shares
since May 5, 1991.
Item 4. Purpose of Transaction.
The Shares held by Trust, Investment and RBG were purchased on behalf
of such Reporting Persons' discretionary account customers for investment.
Finsbury holds all of the Shares for investment on behalf of the
Investment Companies, all of whom are discretionary account customers of
Finsbury. Each of the Investment Companies is the beneficial owner of the Shares
held for its account and purchased such Shares for investment.
The Reporting Persons may, from time to time, depending upon market
conditions and other investment considerations, purchase additional Shares for
investment or dispose of all or part of their respective holdings in the Shares.
Except as stated above, none of the Reporting Persons has any plans or
proposals that relate or would result in any of the transactions referred to in
sub-items (a) through (j) of Item 4 of Schedule 13D.
<PAGE>
Item 5. Interest in Securities of the Issuer.
This Report is the initial filing by the Reporting Persons as a group
and is being filed as a result of the following transaction (the "Acquisition").
On May 1, 1995, Rea Brothers acquired the entire share capital of FGL, which
holds the entire share capital of Finsbury, pursuant to the terms of that
certain Acquisition Agreement dated April 4, 1995 between FTP, FGT, Ocean, FSCT,
a subsidiary of the 1961 Settlement, Malcolm King, Hillary Spear and Rea
Brothers. As a result of the Acquisition, Rea Brothers may be deemed to be the
beneficial owner of the Shares beneficially owned by the Finsbury Entities.
Accordingly, each of the Reporting Persons agreed to file this report on a
consolidated basis, rather than to continue making separate filings as the Rea
Entities and Finsbury Entities. See Exhibit A.
As of the close of business on December 31, 1995, the Reporting Persons
held the following number of Shares and the approximate percentage of Shares
outstanding:
% of Shares
Reporting Person Number of Shares Outstanding (C)
---------------- ---------------- ---------------
FTP 61,000 3.0
Ocean 30,000 1.5
FGT 27,000 1.3
FSCT 16,000 0.8
Finsbury 134,000(A) 6.7
Trust 90,000 4.5
Investment 3,934 .2
RBG 143,452 7.2
Rea Brothers 371,386(B) 18.5
- ------------------
(A) Represents the aggregate amount of Shares held by the
Investment Companies. All such Shares are held by Finsbury for
the account of the Investment Companies pursuant to
discretionary management agreements. Finsbury does not hold
any Shares for its own account.
(B) Represents the aggregate amount of Shares held by the
Reporting Persons. Such Shares may be deemed to be
beneficially owned by Rea Brothers as a result of Rea
Brothers' direct or indirect ownership of all the capital
shares of Finsbury, Trust, Investment and RBG. Rea Brothers
does not hold any Shares for its own account.
(C) Based on 2,004,014 Shares outstanding as of November 30, 1995,
as reported by the Companies in their Quarterly Report on Form
10-Q for the quarterly period ended November 30, 1995.
<PAGE>
The table above reflects the following transactions each of which were
effected in over-the-counter transactions in the United States subsequent to the
last amendments filed to each of the Finsbury Report and Rea Report:
1) On January 25, 1994, 10,000 Shares were sold by RBG
for a price of $5.50 per share;
2) On July 7, 1994, 10,000 Shares were sold by RBG for
a price of $6.00 per share;
3) On September 14, 1994, 5,000 Shares were sold by
Trust for a price of $6.40 per share;
4) On June 15, 1995, 6,000 Shares were sold by RBG for
a price of $5.00 per share;
5) On June 19, 1995, 2,300 Shares were sold by RBG and
2,500 Shares were sold by Trust for a price of
$5.125 per share;
6) On August 8, 1995, 1,000 Shares were sold by RBG for
a price of $5.125 per share;
7) On September 5, 1995, 112 and 673 Shares were sold
by Investment for a price of $5.50 per share; and
8) On September 29, 1995 Finsbury sold 7,000 Shares and
5,000 Shares on behalf of FGT and FSCT for a price
of $5.875 and $5.875, respectively.
To the best knowledge of the Reporting Persons, none of the individuals
listed in Appendix A beneficially owns any Shares. To the best knowledge of the
Reporting Persons, none of the Reporting Persons or the individuals listed in
Appendix A effected any transactions in the Shares during the past 60 days.
Each of FTP, Ocean, FGT and FSCT's respective management agreements
with Finsbury provide as follows:
Where there are attached to the aggregate of the holdings of investment
contained in the portfolio of your company and any other company
managed by us three percent (or such other percentage as may from time
to time be prescribed by regulations under section 201 of the Companies
Act 1985) or more of all the voting rights attributable to the share
capital of that company which are from time to time exercisable at a
general meeting we shall only act in accordance with the written
instructions of the Board before exercising any voting or other rights
attached to or involved in such holding or any part thereof.
<PAGE>
Accordingly, Item 7 of each of the Investment Companies' cover pages
reflect the fact that the sole voting power with respect to the Shares held by
such Investment Company is held by such Investment Company, rather than by
Finsbury. While Finsbury shares dispositive power over the shares held by the
Investment Companies with the applicable Investment Company, no dispositions
over the Shares are made without the prior approval of the respective Investment
Company board.
Each of Trust, Investment and RBG has sole dispositive power over the
Shares held on behalf of such Reporting Persons' discretionary account
customers. Rea Brothers has no direct dispositive or voting power over the
Shares and is a Reporting Person solely because it may be deemed to be a
beneficial owner of the Shares as a result of its ownership of Finsbury, Trust,
Investment and RBG.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Finsbury has a separate management agreement with each of the
Investment Companies, and except for provisions relating to the manager's
compensation, all such agreements are identical. The agreements provide the
powers of disposition and voting described in Item 5. Finsbury is entitled to
receive management fees as provided in such agreements for its services. The
copies of the Agreements, as amended, between Finsbury and each of the
Investment Companies are attached hereto as Exhibits E through H.
Item 7. Material to be Filed as Exhibits.
Exhibit A - Agreement among Reporting Persons
Exhibit B - SEC Complaint*
Exhibit C - Final Order*
Exhibit D - Undertakings*
Exhibit E - FTP Management Agreement
Exhibit F - Ocean Management Agreement
Exhibit G - FGT Management Agreement
Exhibit H - FSCT Management Agreement
* Previously filed.
<PAGE>
APPENDIX A
----------
REA BROTHERS GROUP PLC
The following is a list of the directors and officers of Rea Brothers.
Each of the persons listed is a citizen of the United Kingdom and is principally
employed as a director of Rea Brothers, unless otherwise stated. The address of
the principal office of Rea Brothers and the business address of each person
listed below is Alderman's House, Alderman's Walk, London EC2M, England.
Chairman
--------
Sir Hugh Cubitt (1)
Deputy Chairman
---------------
W. H. Salomon (2)
Managing Director
-----------------
R.W. Parsons (3)
Directors
---------
A. A. Hall (4)
M.J.E.G. Bower (5)
C.M.Davidge (6)
J. A. V. Townsend (7)
A.W. Dyer (8)
G.R. Moreno (9)
Sir John Hill (10)
Notes
(1) Retired.
(2) See attached list of directorships.
(3) See attached list of directorships.
(4) Citizen of Guernesy. See attached list of directorships.
(5) See attached list of directorships.
(6) Managing Director, Christies PLC, 8 King Street, London SW1, England.
(7) See attached list of directorships.
(8) Retired.
(9) U.S. Citizen; retired.
(10) Retired.
<PAGE>
FINSBURY GROUP LIMITED
The following is a list of the directors and executive officers of FGL.
Each of the persons listed is a citizen of the United Kingdom. The address of
the principal office of FGL and of the principal place of business of each
person listed is Neptune House, Titon Court, 14 Finsbury Square, London EC2A
1BR, England.
Directors
---------
W.H. Salomon (1)
J.A.V. Townsend (2)
D. Bailey (3)
J.M.P. Welman (4)
Notes
- -----
(1) See attached list of directorships.
(2) See attached list of directorships.
(3) See attached list of directorships.
(4) See attached list of directorships.
<PAGE>
FINSBURY ASSET MANAGEMENT LIMITED
The following is a list of the directors and executive officers of
Finsbury. Each of the persons listed is a citizen of the United Kingdom and is
principally employed as a director or executive officer of Finsbury, unless
otherwise noted. The address of the principal office of Finsbury and of the
principal place of business of each person listed is Neptune House, Triton
Court, 14 Finsbury Square, London EC2A 1BR, England.
Directors
---------
W. H. Salomon (1)
J.A.V. Townsend (2)
D. Bailey (3)
E.C. Teideman (4)
C. E. Griffin (5)
M. R. King (6)
H. Spivey (7)
J.M.P. Welman (8)
Notes
- -----
(1) Deputy Chairman of Rea Brothers, Director of Rea Brothers, Adam &
Harvey Group PLC, Manganese Bronze Holdings PLC and Immuno
International AG. See attached list of directorships.
(2) Chairman of Rea Brothers Limited, Director of Rea Brothers (Isle of
Man) Limited, Immuno International AG and Blue Ridge Real Estate. See
attached list of directorships.
(3) Former Partner of Phillips & Drew. See attached list of directorships.
(4) Director of OWH and FTP. See list of directorships.
(5) See attached list of directorships.
(6) See attached list of directorships.
(7) See attached list of directorships.
(8) See attached list of directorships.
<PAGE>
FINSBURY TRUST PLC
The following is a list of the directors and executive officers of FTP.
Each of the persons listed is a citizen of the United Kingdom. The principal
employment of each of the persons listed is stated below. The address of the
principal office of FTP and of the principal place of business of each person
listed is Alderman's House, Alderman's Walk, London EC2M, England, unless
otherwise stated.
Directors
---------
J. Borwick (Chairman) (1)
J.M. St. J. Harris (2)
E.C. Teideman (3)
M. Reeve (4)
Notes
- -----
(1) Managing Director, Manganese Bronze Holdings PLC., 1 Love Lane, London
EC2V 7HJ, England.
(2) Director, Durrington Corporation Limited, 4-5 Governor Place, London,
SWIX 7HJ, England.
(3) See attached list of directorships.
(4) Director, The Tregeare Company Limited, Tregeare House, Launceston,
Cornwall, PLI5 8RE, England. See attached list of directorships.
<PAGE>
OCEAN WILSONS HOLDINGS LIMITED
The following is a list of the Directors and Executive Officers of OWH.
The address of the principal office of OWH is Clarendon House, Church Street
West, Hamilton HM DX, Bermuda. The citizenship, principal employment and the
principal place of business of each of the persons listed is stated below.
Directors
---------
C. Collis (1)
E.C. Teideman (2)
J.F. Gouvea Vieira (3)
B. Huntingdon (4)
N. Carlini (5)
W.H. Salomon (6)
Notes
- -----
(1) British. Deputy Chairman of Bank of Bermuda. Senior Partner of Conyers
Dill & Pearman, Clarendon House, Church Street West, Hamilton HM DX,
Bermuda.
(2) British. Director FTP. Alderman's House, Alderman's Walk, London EC2M,
England. See attached list of directorships.
(3) Brazilian. Managing Partner of Escritorio de Advocacia Gouvea Vieira,
Avenida Rio Branco 85-13th Floor, 20040-004 Rio de Janeiro, Brazil.
(4) Canadian. Associate General Counsel and Vice-President Zurich of
Reinsurance Co., Mythen Quai 2, 8022 Zurich, Switzerland.
(5) Brazilian. Director of Ocean, Wilson Sons Ltda. Avenida Rio Branco, 25
- 7th Floor, CEP 20093-900, P.O. Box 751, Rio De Janeiro - RJ, Brazil.
(6) British. Director of Finsbury, Rea Brothers, Adam & Harvey Group PLC,
Manganese Bronze Holdings PLC and Immuno International AG. See attached
list of directorships.
<PAGE>
OCEAN WILSONS (INVESTMENTS) LIMITED
The following is a list of the Directors and Executive Officers of
Ocean. The address of the principal office of Ocean is Clarendon House, Church
Street West, Hamilton HM DX, Bermuda. The citizenship, principal employment and
the principal place of business of each of the persons listed is stated below.
Directors
---------
C. Charles Collis (Chairman) (1)
E.C. Teideman (2)
J.F. Gouvea Vieira (3)
C.F. Alexander Cooper (4)
N. Carlini (5)
W.H. Salomon (6)
Notes
- -----
(1) British. Deputy Chairman of Bank of Bermuda. Senior Partner of Conyers
Dill & Pearman, Clarendon House, Church Street West, Hamilton HM DX,
Bermuda.
(2) British. Director, FTP. See attached list of directorships.
(3) Brazilian. Managing Partner of Escritorio de Advocacia Gouvea Vieira,
Avenida Rio Branco 85-13th Floor, 20040 Rio de Janeiro, Brazil.
(4) Canadian. Associate General Counsel and Vice-President of Centre
Reinsurance Companies, Cumberland House, One Victoria Street, P. O. Box
HM 1788, Hamilton HM HX, Bermuda.
(5) Brazilian. Director of OWH, Wilson Sons Ltda Avenida Rio Branco, 25 -
7th Floor , CEP 20093-900, P.O. Box 751, Rio de Janiero - RJ, Brazil.
(6) British. Director of Finsbury, Rea Brothers, Adam and Harvey Group PLC,
Manganese Bronze Holdings PLC and Immuno International AG. Alderman's
House, Alderman's Walk, London EC2M, England. See attached list of
directorships.
<PAGE>
FINSBURY GROWTH TRUST PLC
The following is a list of the directors and executive officers of FGT.
Each of the persons listed below is a citizen of the United Kingdom except where
stated. The principal employment of each of the persons listed is stated below.
The address of the principal office of FGT and of the principal place of
business of each person listed is Alderman's House, Alderman's Walk, London
EC2M, England., unless otherwise stated.
Directors
---------
M. Reeve (Chairman) (1)
Rt. Hon. Sir Patrick Nairne, G.C.B., M.C., P.C. (2)
G. W. B. Warman (3)
J. Beckman (4)
S.W. Urry (5)
C. Brundin (6)
Notes
- -----
(1) Director, FTP. Director, The Tregeare Company Limited, Tregeare House,
Launceston, Cornwall, PL15 8RE, England.
(2) Former Permanent Secretary, Department of Health and Social Security;
Retired master of St. Catherine's College, University of Oxford. See
attached list of directorships.
(3) Director, Charterhouse Tilney Securities Ltd., 1 Paternoster Row,
London, EC2, England.
(4) Swedish. Beckman Enoch & Glass Ltd., 10 Hill Street, London WIX 7FU,
England.
(5) Director, Shop & Store Group, Ltd., Burley House, Bradford Road,
Burley-in-Wharfedale, 1lkley, West Yorkshire LS29 7DZ.
(6) Director, Oxford University, School of Management Studies, Radcliffe
Infirmary, Oxford OX2 6HE.
<PAGE>
FINSBURY SMALLER COMPANIES TRUST PLC
The following is a list of the directors and executive officers of
FSCT. Each of the persons listed below is a citizen of the United Kingdom except
where stated. The principal employment of each of the persons listed is stated
below. The address of the principal office of FSCT and of the principal place of
business of the persons listed is Alderman's House, Alderman's Walk, London
EC2M, England., unless otherwise stated.
Directors
---------
S.B. Gibbs (Chairman) (1)
Rt. Hon. Sir Patrick Nairne, G.C.B., M.C., P.C. (2)
J.M.G. Heynes (3)
J.P. de Blocq van Kuffeler (4)
Notes
- -----
(1) Chairman of B Elliot PLC, Elliot House, Victoria Road, London NW10 6NY;
director, Equity Consort Investment Trust PLC, Five Arrows House, St.
Swithins lane, London EC4N 8NR; Director, Moray Firth Malting Ltd.,
Elliot Industrial Estate, Arbroath, Angus DD11 2NJ.
(2) Former Permanent Secretary, Department of Health and Social Security;
Retired Master, St. Catherine's College, University of Oxford. See
attached list of directorships.
(3) Formerly Underwriting Agent at Lloyd's of London. 40 Lime Street,
London EC1, England.
(4) British/Dutch. Chief Executive, Provident Financial PLC, Colonade,
Sunbridge Road, Bradford, BDI 2LQ England.
<PAGE>
REAMANN TRUST COMPANY LIMITED
The following is a list of the directors and executive officers of
Trust. Each of the persons listed is a citizen of the United Kingdom. Each of
the persons listed is principally employed as a director of Trust. The address
of the principal office of Trust and the business address of each person listed
below is P.O. Box 203, 29 Athol Street, Douglas, Isle of Man, British Isles.
Managing Director
-----------------
D.C. Litton, A.C.I.B.
Directors
---------
I.M.E. Bancroft, A.C.I.B.
W.A. Hamilton-Turner, A.C.I.B.
<PAGE>
REA BROTHERS (INVESTMENT MANAGEMENT) LIMITED
The following is a list of the directors and executive officers of
Investment. Each of the persons listed is a citizen of the United Kingdom. Each
of the persons listed is principally employed as a director of Investment,
unless otherwise stated. The address of the principal office of Investment and
the business address of each person listed below is Alderman's House, Alderman's
Walk, London EC2M, England, unless otherwise stated.
Managing Director
-----------------
J.M.P. Welman
Directors
---------
R.W. Parasons (1)
M.J.E.G Bower (2)
M.D. Reeder
A.F. Arscott
P.A. Cook
J.F. Summers
M.R. King
D.B. Black
H. Spivey
J.A.V. Townsend (3)
D.A. Palmer
C.E. Griffin
Notes
(1) Managing Director, Rea Brothers. See attached list of directorships.
(2) Director, Rea Brothers.
(3) Joint Managing Director, Finsbury, Neptune House, Triton Court, 14
Finsbury Square, London EC 2A 1 BR, England. Deputy Chairman of Rea
Brothers, Chairman of Rea Brothers Limited, Director of Rea Brothers
(Isle of Man) Limited, Immuno International AG and Blue Ridge Real
Estate. See attached list of directorships.
<PAGE>
REA BROTHERS (GUERNSEY) LIMITED
The following is a list of the directors and executive officers of RBG.
Each of the persons listed is a citizen of the United Kingdom and resident of
the Bailiwick of Guernsey, except Mr. Teideman, who is a citizen of the United
Kingdom and a resident of England. The address of the principal office of RBG ad
the business address of each of its directors is Commerce House, Les Banques,
St. Peter Port, Guernsey, unless otherwise stated. Each of the persons listed is
principally employed as a director of RBG, unless otherwise stated.
Directors
---------
R.A. Heaume, F.C.C.A. (1)
A.A. Hall (Chairman), A.I.B. (2)
R. Le C. Brelsford (3)
E.C. Teideman, F.C.C.A. (4)
R.W. Parsons (5)
L.J. Banks
M.K. Pratt
W.H. Salomon (6)
S.M. Jones
D.A. Palmer (7)
Notes
- -----
(1) Retired; formerly, Administrator of Income Tax, Guernsey; Cherry Tree,
Clos du Murier, St. Sampsons, Guernsey.
(2) See attached list of directorships.
(3) Advocate, Carey Langlois & Co., 7 New Street, St. Peter Port, Guernsey.
(4) See attached list of directorships.
(5) Managing Director, Rea Brothers, Alderman's House, Alderman's Walk,
London EC2M, England. See attached list of directorships.
(6) See attached list of directorships.
(7) See attached list of directorships.
<PAGE>
SALOMON 1961 SETTLEMENT
Salomon 1961 Settlement is a discretionary family trust settled by the
late Sir Walter and Lady Salomon in 1961. Salomon has no place of business. The
following is a list of the trustees of Salomon, both of which are residents of
Bermuda.
Trustees
--------
Codan Trust Company Limited (1)
Frank Mutch (2)
Notes
- -----
(1) Clarendon House, P.O. Box HM 666, Church Street, Hamilton, Bermuda.
(2) Attorney, Conyers, Dill and Pearman, Clarendon House, P.O. Box HM 666,
Church Street, Hamilton, Bermuda.
<PAGE>
SALOMON 1989 SETTLEMENTS
The Salomon 1989 Settlements are a series of four trusts settled by Lady
Salomon in 1989. The Trusts have no place of business. The following is a list
of the Trustees of the Trusts, both of which are residents of Bermuda.
Trustees
--------
Codan Trust Company Ltd. (1)
Nichols B.B. Dill, Jr. (2)
Notes
- -----
(1) Clarendon House, P.O. Box HM 666, Church Street, Hamilton, Bermuda.
(2) Partner, Conyers, Dill and Pearman, Clarendon House, P.O. Box HM 666,
Church Street, Hamilton, Bermuda.
<PAGE>
SALOMON 1990 SETTLEMENTS
The Salomon 1990 Settlements are a series of sixteen trusts settled by
Lady Salomon in 1990. The Trusts have no place of business. The following is a
list of the Trustees of the Trusts, both of which are residents of Bermuda.
Trustees
--------
Codan Trust Company Ltd. (1)
Nichols B.B. Dill, Jr. (2)
Notes
- -----
(1) Clarendon House, P.O. Box HM 666, Church Street, Hamilton, Bermuda.
(2) Partner, Conyers, Dill and Pearman, Clarendon House, P.O. Box HM 666,
Church Street, Hamilton, Bermuda.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
REA BROTHERS GROUP PLC
By: /s/ Caroline Griffin
-----------------------------
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
FINSBURY ASSET MANAGEMENT LIMITED
By: /s/ Caroline Griffin
-----------------------------
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
FINSBURY TRUST PLC
By: /s/ H. Spivey
-----------------------------
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
OCEAN WILSONS (INVESTMENTS)
LIMITED
By: /s/ E.C. Teideman
-----------------------------
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
FINSBURY GROWTH TRUST PLC
By: /s/ H. Spivey
-----------------------------
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
FINSBURY SMALLER COMPANIES
TRUST PLC
By: /s/ H. Spivey
-----------------------------
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
REAMANN TRUST COMPANY LIMITED
By: /s/ Caroline Griffin
-----------------------------
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
REA BROTHERS (INVESTMENT
MANAGEMENT) LIMITED
By: /s/ Caroline Griffin
-----------------------------
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
REA BROTHERS (GUERNSEY) LIMITED
By: /s/ R. Parsons
-----------------------------
<PAGE>
EXHIBIT A
AGREEMENT
AGREEMENT, dated as of February 29, 1996, by and among the
undersigned entities.
WHEREAS, each of the parties hereto may be construed to
beneficially own shares of common stock (collectively, the "Company Securities")
of Blue Ridge Real Estate Company and Big Boulder Corporation, Pennsylvania
corporations; and
WHEREAS, the parties may be construed to constitute a "group"
with respect to the beneficial ownership of the Company Securities for purposes
of Rule 13d-1 and Schedule 13D promulgated by the United States Securities
Exchange Commission;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. The parties hereto shall prepare a single statement
containing the information required by Schedule 13D with respect to their
respective interests in the Company Securities (the "Schedule 13D"), and the
Schedule 13D shall be filed on behalf of each of them.
2. Each party hereto shall be responsible for the timely
filing of the Schedule 13D and any necessary amendments thereto, and for the
completeness and accuracy of the information concerning it contained therein,
but shall not be responsible for the completeness and accuracy of the
information concerning any other party contained therein, except to the extent
that it knows or has reason to believe that such information is inaccurate.
3. This Agreement shall continue unless terminated by any
party hereto.
4. Jason M. Shargel, Esq., shall be designated as the person
authorized to receive notices and communications with respect to the Schedule
13D and any amendment thereto.
5. This Agreement may be executed in counterparts, each of
which taken together shall constitute one and the same instrument.
1
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above written.
REA BROTHERS GROUP PLC FINSBURY ASSET MANAGEMENT
LIMITED
By: /s/ C. Griffin By: /s/ C. Griffin
------------------------------ -----------------------------
Name: C. Griffin Name: C. Griffin
Title: Company Secretary Title: Director
REAMANN TRUST COMPANY FINSBURY TRUST PLC
By: /s/ C. Griffin By: /s/ H. Spivey
------------------------------ -----------------------------
Name: C. Griffin Name: H. Spivey
Title: Authorized Signatory Title: Company Secretary
for this purpose
REA BROTHERS (INVESTMENT OCEAN WILSONS (INVESTMENTS)
MANAGEMENT) LTD. LIMITED
By: /s/ C. Griffin By: /s/ E. C. Teidman
------------------------------ ------------------------------
Name: C. Griffin Name: E. C. Teideman
Title: Director Title: Director
REA BROTHERS (GUERNSEY) FINSBURY SMALLER COMPANIES
LIMITED TRUST PLC
By: /s/ H. Spivey
By: /s/ R. Parsons ------------------------------
------------------------------ Name: H. Spivey
Name: R. Parsons Title: Company Secretary
Title: Director
FINSBURY GROWTH TRUST PLC
By: /s/ H. Spivey
------------------------------
Name: H. Spivey
Title: Company Secretary
2
<PAGE>
EXHIBIT E
-----------------------------------------------------------------------
Finsbury Asset Management Limited
Neptune House, Triton Court, 14 Finsbury Square, London EC2A lBR
Telephone: 071-256 8873 Telex: 8958024 Fax: 071-638 0541
10 December 1991
The Earl of Dartmouth
Chairman
Lancashire & London Investment Trust PLC
Neptune House
Triton Court
14 Finsbury Square
London EC2A 1BR
Dear Lord Dartmouth,
At a recent Board Meeting of Finsbury Asset Management Limited ("Finsbury") I
was asked to write to you requesting that the fee for the management of the
investment portfolio should be increased from 0.5 percent to 0.75 percent.
In arriving at their decision the Board of Finsbury had before them statements
taken from S G Warburgs Investment Trust Manual for 1990/91 copies of which are
attached. This may be summarised as follows:-
Investments
Basis of Valuation Gross Assets Plus Cash
------------------ ------------ -----------
Average values 1.21% 0.81%
Maximum 2.82% 1.05%
Minimum 0.50% 0.31%
It will be seen that the management fee presently charged by Finsbury is below
the average. In view of the suggested increase in fees the board of Finsbury
would, if the suggestion were approved, be prepared to half the amount presently
charged for rent and rates. On the basis of the fee charged by Finsbury at 30th
September, the annual fees together with the charge for rent and rates would be
as follows:-
Present Revised
@ 0.5% @ 0.75%
Fees 50,340 75,510
Rent & Rates 23,492 11,746
------ ------
L73,842 L87,256
------- -------
Total assets at 30th September L10,068,000
Fees plus rent as percentage of
total assets 0.733% 0.867%
Other factors which influenced Finsbury's decision were firstly that Finsbury
have undertaken substantial amounts of additional work outside normal management
and which might properly be described as corporate advisory and development for
which they have made no charge and secondly, in order to improve the service
given to clients, consideration is being given to expanding the investment
department by engaging an additional investment analyst to seek out special
investment situations.
<PAGE>
2
If the board are agreeable to the above we would propose the following
alterations to the investment management agreement:-
(1) Clause 1.1 of Schedule 3 where a fee of 0.5 percent is mentioned this
should be amended to 0.75 percent.
(2) Clause 1.3 will be amended to reduce the present holding in investment
trusts managed by Finsbury from 5 percent to nil. The effect of this will
be to exclude from the portfolio any investments in investment trusts
managed by Finsbury.
With respect to the investment dealing company Finsbury are proposing to reduce
their share of the profits from the present 20 percent to 15 percent.
As you are aware under the present arrangements the agreement may be terminated
on the giving of twelve months notice in January of each year. This means that
the period of notice can be as long as 24 months or as short as 12 months.
Finsbury consider this to be unsatisfactory and propose that the period of
notice should be amended to be 20 months from the date of notification of
termination.
The above alterations will have effect from 1st January, 1992 if your board
agrees.
You will be aware that the fee charged by Finsbury for secretarial services is
L22,500 per annum. In view of increasing costs we feel that this should also be
considered at the end of March, 1992. We will be writing later in this
connection.
Yours sincerely,
E C Teideman
<PAGE>
Finsbury Asset Management Limited
Neptune House, Triton Court, 14 Finsbury Square, London EC2A 1BR
Telephone: 071-256 8873 Telex: 8958024 Fax: 071-(338 0541
19 March 1991
The Earl of Dartmouth
Chairman
Lancashire & London Investment Trust PLC
The Manor House
Chipperfield
Kings Langley
Herts WD4 9BN
Dear Lord Dartmouth,
The agreement for secretarial services between your company and this company was
entered into on 1st April, 1988 at an annual fee of L20,000 per annum.
There has been no increase in this fee since the commencement of the contract
despite inflation of 25 percent up to 31st December, 1990. We are of the view
that an increase in the fee of L5,000, in line with inflation, would be
appropriate. However, in view of the size of the trust it may not be appropriate
to increase the fee by this amount. We therefore propose, subject to your
agreement, to increase the fee for 1991 to L22,500 with effect from 1st January.
In order that this situation should not recur in future years we would suggest
that the agreement be amended to enable the fee to be adjusted annually in line
with the rate of inflation.
We should be grateful for your agreement to the above.
Yours sincerely,
E C Teideman
cc To all Directors of
Lancashire & London Investment Trust PLC
<PAGE>
Finsbury Asset Management Limited
Neptune House, Triton Court, 14 Finsbury Square, London EC2A lBR
Telephone: 071-256 8873 Telex: 8958024 Fax: 071-638 0541
10 December 1991
The Earl of Dartmouth
Chairman
Lancashire & London Investment Trust PLC
Neptune House
Triton Court
14 Finsbury Square
London EC2A 1BR
Dear Lord Dartmouth,
At a recent Board Meeting of Finsbury Asset Management Limited ("Finsbury") I
was asked to write to you requesting that the fee for the management of the
investment portfolio should be increased from 0.5 percent to 0.75 percent,
In arriving at their decision the Board of Finsbury had before them statements
taken from S G Warburgs Investment Trust Manual for 1990/91 copies of which are
attached. This may be summarised as follows:-
Investments
Basis of Valuation Gross Assets plus cash
------------------ ------------ ---------
Average values 1.21% 0.81%
Maximum 2.82% 1.05%
Minimum 0.50% 0.31%
It will be seen that the management fee presently charged by Finsbury is below
the average. In view of the suggested increase in fees the board of Finsbury
would, if the suggestion were approved, be prepared to half the amount
presently charged for rent and rates. On the basis of the fee charged by
Finsbury at 30th September, the annual fees together with the charge for rent
and rates would be as follows:-
Present Revised
@ 0.5% @ 0.75%
Fees 50,340 75,510
Rent & Rates 23,492 11,746
------ ------
L73,842 L87,256
Total assets at 30th September L10,068,000
----------
Fees plus rent as percentage of
total assets 0.733% 0.867%
Other factors which influenced Finsbury's decision were firstly that Finsbury
have undertaken substantial amounts of additional work outside normal management
and which might properly be described as corporate advisory and development for
which they have made no charge and secondly, in order to improve the service
given to clients, consideration is being given to expanding the investment
department by engaging an additional investment analyst to seek out special
investment situations.
<PAGE>
2
If the board are agreeable to the above we would propose the following
alterations to the investment management agreement:-
(1) Clause 1.1 of Schedule 3 where a fee of 0.5 percent is mentioned this
should be amended to 0.75 percent.
(2) Clause 1.3 will be amended to reduce the present holding in investment
trusts managed by Finsbury from 5 percent to nil. The effect of this will
be to exclude from the portfolio any investments in investment trusts
managed by Finsbury.
With respect to the investment dealing company Finsbury are proposing to reduce
their share of the profits from the present 20 percent to 15 percent.
As you are aware under the present arrangements the agreement may be terminated
on the giving of twelve months notice in January of each year. This means that
the period of notice can be as long as 24 months or as short as 12 months.
Finsbury consider this to be unsatisfactory and propose that the period of
notice should be amended to be 20 months from the date of notification of
termination.
The above alterations will have effect from 1st January, 1992 if your board
agrees.
You will be aware that the fee charged by Finsbury for secretarial services is
L22,500 per annum. In view of increasing costs we feel that this should also be
considered at the end of March, 1992. We will be writing later in this
connection.
Yours sincerely,
E C Teideman
<PAGE>
Finsbury Asset Management Limited
Neptune House, Triton Court, 14 Finsbury Square, London EC2A lBR
Telephone: 071-256 8873 Telex: 8958024 Fax: 071-638 0541
19 March 1991
The Earl of Dartmouth
Chairman
Lancashire & London Investment Trust PLC
The Manor House
Chipperfield
Kings Langley
Herts WD4 9BN
Dear Lord Dartmouth,
The agreement for secretarial services between your company and this company was
entered into on 1st April, 1988 at an annual fee of L20,000 per annum.
There has been no increase in this fee since the commencement of the contract
despite inflation of 25 percent up to 31st December, 1990. We are of the view
that an increase in the fee of L5,000, in line with inflation, would be
appropriate. However, in view of the size of the trust it may not be appropriate
to increase the fee by this amount. We therefore propose, subject to your
agreement, to increase the fee for 1991 to L22,500 with effect from 1st January.
In order that this situation should not recur in future years we would suggest
that the agreement be amended to enable the fee to be adjusted annually in line
with the rate of inflation.
We should be grateful for your agreement to the above.
Yours sincerely,
E C Teideman
cc To all Directors of
Lancashire & London Investment Trust PLC
<PAGE>
Finsbury Asset Management Limited
Neptune House, Triton Court, 14 Finsbury Square, London EC2A lBR
Telephone: 071-256 8873 Telex: 8958024 Fax: 071-638 0541
3 January 1991
The Directors
Lancashire & London Investment Trust PLC
Neptune House
Triton Court
14 Finsbury Square
London EC2A 1BR
Dear Sirs
At a meeting of the directors of Finsbury Asset Management, held on 17 December
1990, consideration was given to the level of annual fees to be charged in
respect of secretarial fees provided by this company under the agreement
effective from 1 April 1988.
In light of the subsequent level of inflation since the agreement the directors
have asked me to write to you requesting that the original fee of L20,000 p.a.
be indexed to take inflation into account and that the annual fee be increased
to L25,000 p.a. with effect from 1 January 1991.
Yours faithfully
Secretary
<PAGE>
Finsbury Asset Management Limited
Neptune House, Triton Court, 14 Finsbury Square, London EC2A lBR
Telephone: 071-256 8873 Telex: 8958024 Fax: 071-638 0541
9 October 1990
The Secretary
Lancashire & London Investment Trust PLC
Neptune House
Triton Court
14 Finsbury Square
London EC2A 1BR
Dear Sirs
RE: FORMER HOLDING OF 91264 ORDINARY SHARES OF
SCOTTISH CITIES INVESTMENT TRUST PLC
The management agreement between Lancashire & London Investment Trust PLC and
Finsbury Asset Management Limited in Schedule 3 sets out the basis of
calculating the management fee. Clause 1.3 of the schedule provides that there
shall be excluded from the portfolio a holding in any investment trust of which
Finsbury are the manager and where the holding represents 5 percent or more in
nominal value of the equity share capital of that company.
Your former holding of 91264 Ordinary shares of Scottish Cities Investment Trust
PLC represented 2.77 percent of the equity share capital of that company and
should therefore be included in the portfolio. In the past, this holding has
been excluded in error resulting in an undercharge of management fees by this
company. We shall therefore shortly be issuing additional invoices to cover the
amount undercharged during your current accounting year. We do not propose to
re-open past years.
Please accept our apologies for any inconvenience this may cause.
Yours faithfully
E C Teideman
<PAGE>
Finsbury Asset Management Limited
Neptune House, Triton Court, 14 Finsbury Square, London EC2A lBR
Telephone: 071-256 8873 Telex: 8958024 Fax: 071-638 0541
26th September, 1990
Lancashire & London
Investment Trust PLC
Neptune House
Triton Court
14 Finsbury Square
London EC2A IBR
Dear Sirs,
I write to inform you that following the liquidation of Fashion & General
Investment Trust PLC future rent and management costs will be recharged on the
basis of one sixth of the total per company as against the previous one seventh
per company. The change is effective from 1st July, 1990.
In addition it should be noted that the management company is currently
disputing a proposed rental increase from L48,000 to L130,000 pa. Although it is
hoped to achieve a reduction in the proposed amount is it clear that there will
be a substantial increase in the future.
Yours faithfully,
J W L Farrar
- ------------------------
SECRETARY
<PAGE>
Lancashire & London Investment Trust PLC
Neptune House, Triton Court, 14 Finsbury Square, London EC2A lBR
Telephone: 071-256 8873 Telex: 8958024 Fax: 071-638 0541
18 September 1989
Finsbury Asset Management Ltd
Neptune House
Triton Court
14 Finsbury Square
LONDON EC2A 1BR
Dear Sirs
We refer to the Agreement dated 7th July 1989 between you and us whereby you
agreed to provide us with certain investment management services on the terms
and subject to the conditions set out therein ("the Agreement").
Pursuant to Clause 5.2 of the Agreement, we hereby request that the Agreement be
varied with immediate effect by the addition to sub-clause 8.1.2 thereof of the
following proviso:-
"Provided always that where there are attached to the aggregate of the
holdings of investments contained in the portfolio of your company and
any other company managed by us five percent (or such other percentage
as may from time to time be prescribed by regulations under Section 201
of the Companies Act 1985) or more of all the voting rights
attributable to the share capital of that company which are from time
to time exercisable at a general meeting we shall only act in
accordance with the written instructions of the Board before exercising
any voting or other rights attached to or involved in such holding or
any part thereof."
Save as varied above, the Agreement shall continue in full force and effect in
all respects.
<PAGE>
Please acknowledge receipt of this letter and confirm your acceptance of our
request by signing the attached and returning it to us marked for the attention
of the Company Secretary.
Yours faithfully
SECRETARY DIRECTOR
for and on behalf of
LANCASHIRE & LONDON INVESTMENT TRUST PLC
We acknowledge receipt of the letter of which the above is a copy and confirm
our acceptance of your request set out in such letter.
Dated 1989
for and on behalf of
FINSBURY ASSET MANAGEMENT LIMITED
<PAGE>
Finsbury Asset Management Limited
Neptune House, Triton Court, 14 Finsbury Square, London EC2A lBR
Telephone: 071-256 8873 Telex: 8958024 Fax: 071-638 0541
To: LANCASHIRE & LONDON INVESTMENT TRUST PLC
of Neptune House, Triton Court, 14 Finsbury Square, London EC2A
IBR
Introduction
1. We are a member of the Investment Management Regulatory Organisation
("IMRO") and as such regulated by IMRO in the conduct of investment business
(as defined in the Financial Services Act 1986 ("the Act")) and are bound by the
rules including any regulations made by the Board of IMRO as altered, amended,
added to or cancelled from time to time ("the IMRO Rules")
2. We have been informed by you and believe that you carry on business as an
approved investment trust and are a business Investor as defined in the IMRO
rules and set out in Schedule 5 and wish us to provide you with certain
investment management services on that basis (including but not limited to
advising on and managing Investments within the meaning of the Act) and details
of which services are set out in paragraphs 7, 8 and 9 ( "the Services") which
we are pleased to agree to provide on the terms and subject to the conditions of
this Agreement and the Schedules which form part of this Agreement.
The Services will be provided on the basis that you are a business
Investor and in consequence you will not obtain the benefit of certain of the
IMRO Rules.
<PAGE>
Appointment
3. We are appointed as your sale Investment Managers with effect from the time
of the receipt by us of the enclosed copy of this Agreement with the endorsed
confirmation of your acceptance signed by you. Our appointment shall continue in
full force and effect unless and until terminated in accordance with paragraph
5.1 below.
4. We reserve the right to perform our obligations through and/or delegate any
of our discretions to the agency of any subsidiary, associated company or any
third party of our choosing, provided that we have obtained the prior written
consent of the Board of Directors for the time being of your Company ("the
Board") so to do and that such transaction will ensure "best execution".
Termination and Variation
5.1 Our appointment may be terminated by either of us giving to the other in
January in any year not less than 12 months written notice or such shorter
notice as the other may agree to accept. Any termination of this Agreement shall
be without prejudice to the completion by us of any transactions already
initiated and any antecedent liability of either party.
5.2 This Agreement may only be varied by written agreement signed by both
parties.
Disclosure
6. 1 We specifically draw ycur attention to the disclosure that certain of our
customers are "Controllers" and one of our customers is a Connected Customer
within the meaning of the IMRO Rules and to the other statements contained in
Schedule 4.
6.2 Your attention is also drawn to the warnings and statements set out in
Schedule 6 and appendices thereto.
6.3 The validity of this Agreement shall not be impeached on the grounds of
Schedule 4 or Schedule 6.
<PAGE>
The Services
7.1 We shall have full discretion to manage all investments and funds within
your portfolio from time to time ("the Portfolio") and shall advise the Board
as we consider appropriate in accordance with the Investment Objectives
set-out in Schedule 2 or as the Board may require but otherwise (save as
provided in paragraph 7.2 below) may act without restriction, and in particular
as to the types of investment, the markets in which investments are made, the
amount of any one investment and the proportion of the Portfolio which any one
investment or any particular kind of investment may contribute. Particulars of
the Portfolio as at the date of this Agreement and of the initial values
thereof are set out in Schedule 1.
7.2 The Services undertaken by us under this Agreement shall be subject to the
Investment Limitations set out in Schedule 2 and to the policies, direction and
control of the Board which will define your investment and other policies from
time to time.
7.3 We shall effect the investment and re-investment of the Portfolio including
by way of underwriting participation and the income arising therefrom in
accordance with your Memorandum and Articles of Association and the investment
policies of the Board and arrange for the transfer of investments into your name
or the name of your nominee.
7.4 Unless and until you notify us in writing not to do so without a further
Agreement, the Services will include advising on or effecting transactions
relating to Options, Futures, or Contracts for Differences or Margined
Transactions.
7.5 We will inform you in writing, in relation to any transaction we effect with
or for you:-
7.5.1 if commission mark up or mark down will be payable otherwise than by you
to us or at our direction or to or at the direction of any of our Associates;
<PAGE>
7.5.2 if we will also be remunerated by the other party to the transaction;
7.5.3 if the transaction relates to securities which have been the subject
of a primary or secondary offer thereof made within six months next
before the date on which the transaction is effected and we or any of
our Associates provided underwriting or other services in connection
with that offer.
7.6 All transactions to be effected for vou with or through the agency of a
person who provides services under any Relevant Arrangements (as defined in Rule
6.01 of the IMRO Rules) will be effected so as to secure for your best
execution of the transaction disregarding any benefit which might enure directly
or indirectly to you from the service or benefits provided under that
arrangement. There are no Relevant Arrangements at the date of this Agreement.
Powers
8.1 Unless and until otherwise agreed between us in the performance of our
obligations under this Agreement we:-
8.1.1. may enter into make and perform all such contracts agreements and
other undertakings as may in our opinion be necessary or advisable or
incidental to the carrying out of the Investment Objectives;
8.1.2 may exercise on your behalf all voting and other rights attaching to
or involved in the holding of Investments as we in our absolute
discretion consider appropriate and unless otherwise directed by
written instructions from the Board;
8.1.3 shall be entitled to obtain and or act or rely upon the opinion or
advice of or any information received from any broker, lawyer, valuer,
surveyor or other expert whether reporting to you or to us;
<PAGE>
8.1.4 shall not be precluded from contracting or entering into any financial
or other transaction with you and in the case of any transaction being
in respect of any Investment shall be entitled to deal at a net price
computed after taking into account our costs and expenses arising out
of or in connection with such transaction;
8.1.5 may buy Shares in any company whose Investments or assets we manage
without your prior consent;
8.1.6 commit you to an obligation to underwrite any issue or offer for sale
of securities without any restriction on the categories of securities
or financial limits on the extent of such underwriting; with the
exception of those referred to in Schedule 2.
8.1.7 may at our discretion and in all circumstances commit you (without
limit on the extent to which this may be done) to supplement the funds
in the Portfolio either by borrowing on your behalf or committing you
to a contract the performance of which may require you to supplement
such funds or to a transaction relating to Options, Futures or
Contracts for Differences whereby you may be required to pay a deposit
or margin in support of that transaction, or to supplement that
payment after the transaction has been effected.
8.2 We shall do all such things to enable you to comply with your obligations
under any regulatory rules regarding Investments.
8.3 We shall not be liable for the consequences of any investment decision made
within the Investment Objectives but we agree to indemnify you in respect of
loss incurred as a result of gross negligence, wilful default or fraud by us or
any of our employees. We shall not be liable for the default of any custodians
or bankers.
<PAGE>
8.4 We shall have the right for ourselves, our representatives and employees to
make unsolicited calls on you at any time at our discretion and may send you any
research and communicate to you any specific recommendations in any manner.
Administration
9.1 Unless otherwise agreed in writing we shall not hold any of your Investments
or money or any documents of title relating thereto, but will lodge the same
with bankers nominated by you in writing from time to time for safe custody or
for the credit of your relevant bank account as the case may be.
9.2 We shall have power to give instructions to such bankers to effect all
settlements and transactions and shall have a limited mandate in relation to the
operation of your relevant account.
9.3 We shall use reasonable endeavours to procure that such brokers as we may
from time to time appoint will forward to you copies of all contract notes
dividend tax vouchers and other advices issued or received by them showing
income received, the basis of fees and commissions charged and transactions
entered into.
9.4 We shall supply the Board quarterly with a valuation of the Portfolio and
more frequently if required by the Board the valuations other than the quarterly
valuations to be at your expense.
9.5 It shall not be our responsibility to collect income or reclaim Income Tax
from the Inland Revenue.
9.6 We may aggregate your transactions with those of our other clients
(including our Connected Customer) without prior agreement.
<PAGE>
Remuneration, Fees and Expenses
10. Our fees and charges are calculated on the basis and at the rates shown in
Schedule 3.
Indemnity Insurance
11. We do not maintain indemnity insurance.
Complaints Procedure
12.1 Any Complaints regarding any alleged breach or non-observance of any of our
obligations contained in this Agreement of which you may at any time become
aware should be made in writing to our Compliance Officer who will promptly
acknowledge your letter, notify our Chairman and investigate the circumstances
(which may involve your supplying any necessary information and your general
co-operation) and will report the results to you.
12.2 If a complaint remains unresolved between ourselves we will supply you with
a copy of the IMRO complaints procedure and you may approach IMRO and the
Securities and Investments Board direct.
Confidentiality
13.1 Both parties will at all times respect and protect the confidentiality of
information acquired as a result of this Agreement excent as required by law by
way of disclosure to any competent regulatory body or authority.
13.2 It may be necessarv in order to comply with Paragraph 13.1 to supply such
information to a body outside the United Kingdom in which event we will notify
you and any expenses so incurred will forthwith be reimbursed by you.
<PAGE>
Interpretation
14. In this Agreement unless the context otherwise requires words and
expressions defined in the IMRO Rules shall have the same meaning herein.
Validity
15.1 In the event that any provision of this Agreement shall finally be
determined to be unlawful in accordance with English law such provision shall be
deemed severed therefrom but every other provision thereof shall remain in full
force and effect unless the business purpose of this Agreement is frustrated
thereby.
15.2 If any conflict shall arise between the provisions of this Agreement and
the IMRO Rules then such Rules shall prevail.
Kindly acknowledge receipt of this Agreement and confirm your acceptance of
these terms and conditions by signing the attached copy and returning it to us
marked for the attention of the Company Secretary.
Dated the 7th day of July 1989
Signature of
on behalf of FINSBURY ASSET MANAGEMENT LIMITED
<PAGE>
We acknowledge receipt of the Agreement of which this is a copy and confirm we
are a business Investor and our acceptance of the terms and conditions set-out
in such Agreement.
Dated the 7th day of July 1989.
Signature of )
on behalf of LANCASHIRE & LONDON )
INVESTMENT TRUST PLC )
<PAGE>
SCHEDULE 2
INVESTMENT OBJECTIVES
The maximisation of total return on capital invested through either
capital gain or income as investment opportunities present themselves.
INVESTMENT LIMITATIONS
Excluded Investments: Life Policies
Unit Trusts
PEPS
Collective Investment Schemes
Underwriting
The company's financial exposure in underwriting any issue or offer for
sale of securities shall be limited to L500,000 in respect of any one
issue or offer for sale unless prior approval of the board be obtained.
<PAGE>
SCHEDULE 3
Remuneration, Fees, Expenses and Indemnity
1. Our fees and charges by way of remuneration for the Services pursuant to this
Agreement are levied and payable on the following basis:-
1.1 On the date of each valuation ("the relevant Valuation Date") a fee
shall be payable by you equal to that proportion of 1/2 per cent of the
total value of the Portfolio (for the avoidance of doubt, disregarding
any borrowings associated with any holdings in the Portfolio) as at
that relevant Valuation Date which the number of days from the
immediately preceding Valuation Date (or in the case of the first
valuation after the date of this Agreement from such date) to the
relevant Valuation Date bears to 365. We shall be entitled to debit
such fee directly to your account with your bankers from time to time.
1.2 A valuation of the Portfolio shall be made as at the date on which this
Agreement is terminated and you shall may us a fee calculated as
provided in 1.1 above by reference to such valuation. Such valuation
shall include any investments the subject of uncompleted sales but
shall exclude the value of any investments represented by uncompleted
purchases.
1.3 For the purpose of this clause "the Portfolio" shall exclude a holding
by you or on your behalf in any investment trust company (as defined in
Section 842 ICTA 1988) of which we are for the time being sole
investment manager where such holding represents 5% or more in nominal
value of the equity share caqital of such company. For the avoidance of
doubt "the Portfolio" shall include a holding by you or on your behalf
in any of Rea Brothers Group Plc, Ocean Wilsons (Holdings) Plc, or
Stocklake Holdings Plc.
2. We shall be entitled to be reimbursed on demand all expenses (including the
fees of any advisers appointed pursuant to paragraph 8.1.3) properly incurred in
the performance of our obligations. Where we acting in our capacity as your
investment manager enter into commitments or incur expenses on your behalf any
consequent liabilities (other than such as may arise from the wilful default,
gross negligence or fraud on our part) shall either be met by you direct or we
shall be entitled to use any of your funds under our administrative control to
discharge such liabilities and to the extent that we shall make any payment on
ycur behalf or incur or suffer any liability, obligation, loss, damage, penalty,
judgment, cost or expense of any kind whatsoever acting in such capacity
aforesaid we shall (except as aforesaid) be fully indemnified in respect thereof
by you.
<PAGE>
SCHEDULE 4
DISCLOSURE STATEMENT
1.1 We bring to your attention that, of our customers, a full list of whom is
available to you on request one is a Connected Customer and certain others are
Associates (for the purposes of the IMRO Rules) of and materially connected with
our holding company Finsbury Group Limited.
1.2 We have the right without prior reference to you:-
1.2.1 to effect with or for you transactions in which we or our holding
company or any of its other subsidiaries have or has directly or
indirectly a material interest (other than any interest arising solely
from our or its participation in the transaction) or any relationship
of any description with another person such as to place us in a
position where our duty or interest in relation to such other person
conflicts with our duty to you. The Portfolio may include securities
where the issue or offer for sale was underwritten, managed or arranged
by us or any of our Associates within the preceding twelve months.
1.2.2 to buy investments from or sell investments to you when acting as a
principal or as an agent for any of our Associates.
1.2.3 to act in the same transaction as both an agent for you and also as an
agent for the other party provided that the terms are at least as good
as those available elsewhere and to Associates. If you so require we
shall inform you so far as we are able without breaching any obligation
of confidentiality of the nature of any association in any such
transaction.
<PAGE>
SCHEDULE 5
DEFINITIONS
Business Investor
(1) Means:-
(a) a government, local authority or public authority
within the meaning of Note 1 to paragraph 3 of
Schedule 1 to the Act, or
(b) a company satisfying any of the criteria set out in
paragraph (2) below and which carries on a business
which is not Investment Business or, if it is
Investment Business, may under the Act be lawfully
carried on by that body without its being an
Authorised Person, and
(2) the criteria referred to in paragraph (1) are the following:-
(a) if the company is a Body Corporate which has more
than 20 members or which, being a Subsidiary, has a
Holding Company which has more than 20 members, the
company or any of its Holding Companies or any of
its Subsidiaries has a called up share capital, or
net assets, of not less than L500,000, or
(b) if the company is a Body Corporate other than one
described in sub-paragraph (a), the Company or any
of its Holding Companies or any of its
Subsidiaries has a called up share capital,
net assets, of not less than L5 million, or
(c) if the company is not a Body Corporate, the company
has net assets of not less than L5 million.
<PAGE>
Experienced Investor
In relation to a transaction of any description in an Investment of
any description, means an individual who in any period of 12 months has so
frequently entered into transactions (whether on his own behalf or in the course
of his employment and on behalf of his employer) relating to Investments of
that description, with or through the agency of reputable persons who carry on
Investment Business, being transactions of substantial size, or of substantial
size in relation to his total wealth, that he can reasonably be expected to
understand the nature of that Investment and the risks involved in entering into
such transactions.
For the purpose of this definition:-
(a) an individual who is an Experienced Investor in
relation to a transaction of any description
involving an Investment which is (i) readily
realisable and (ii) within paragraphs 1 to 3 of
Schedule 1 to the Act, is deemed to be also an
Experienced Investor in relation to transactions of
that same description in any other Investment which
is (i) readily realisable and (ii) within paragraphs
1 to 3 or also paragraph 6 of that Schedule; and
(b) an individual who is an Experienced Investor in
relation to transactions of any description in
Futures, Options or Contracts for Differences which
are effected under the rules of a Recognised or
Designated Investment Exchange and in a contract of a
type traded in such an Exchange, is deemded to be
also an Experienced Investor in relation to such
transactions which are not effected in that way; and
<PAGE>
(c) an individual who is an Experienced Investor in
relation to transactions of any description in
Futures, Options or Contracts for Differences which
are effected with or through the agency of a listed
institution (within the meaning of Section 43 of the
Act), is deemed to be also an Experienced Investor in
relation to such transactions which are not effected
in that way, and
(d) a body of persons, whether incorporated or not, which
carries on a business or acts as a trustee, shall be
deemed to be an Experienced Investor in relation to
transactions of a particular type entered into by it
through the agency of an individual who is a member,
officer or employee of such body and who is an
Experienced Investor in relation to transactions of
that type; and
(e) all individual joint trustees of an express trust
are, if one of the trustees is an Experienced
Investor in relation to transactions of a particular
type, deemed to be Experienced Investors in relation
to transactions of that type entered into on behalf
of the trust.
Professional Investor
In relation to any services provided by a Member, means a person
who carries on Investment Business (including a person treated as carrying on
Investment Business by virtue of Section 191 of the Act) and for whom those
services are provided in the course of his doing so.
Connected Company
In relation to a person, means:
<PAGE>
(a) if the Person is a company, a company in whose case
any of the following conditions is fulfilled:
(i) the same person is the Controller of each
company, or
(ii) each company has a group of two or more
persons as Controller, and the group consists
of the same persons; or each company has a
group of two or more persons as Controller,
and the group would consist of the same
persons if any member of it (or any number of
members of it) were to be replaced by:
A Close Relative of the member, or
A partner of the member, or
A company of which the member is an Officer
or Controller.
(iii) both companies are members of the same Group;
(b) if the person is a partnership, a company in whose
case either of the following conditions is
fulfilled:
(i) that partnership or one of its partners is a
Controller of the company; or
(ii) one or more of the partners in that
partnership and any Close Relatives of any of
them taken separately or taken together, is a
Controller or are Controllers of the company;
<PAGE>
(c) if the person is an individual, a company in whose
case either of the following conditions is fulfilled:
(i) that individual is the Controller of the
company; or
(ii) that individual and any of the Close Relatives
of that individual, either taken separately or
taken together, is a Controller or are
Controllers of the company.
Connected Customer
In relation to a Member, means any person who is:-
(a) a partner of the Member, or
(b) an employee of the Member or of an Associate of the
Member, or
(c) an Appointed Representative of the Member or an
employee of such an Appointed Representative, or
(d) where the Member is a company,
(i) a Controller (other than a Regulated
Insurance Company) of the Member, or
(ii) an Officer of the Member, or
(e) the Close Relative of any individual described in
heads (a) to (d) above or of the Member, or
(f) a person in his capacity as trustee of a trust (other
than an Occupational Pension Scheme) the
beneficiaries of which he knows or ought reasonably
to know include any person described in heads (a) to
(e) above, or
<PAGE>
(g) a company (other than a Regulated Insurance Company)
which is a Connected Company of the Member
but, for the purpose of Rule 11 of Chapter IV of the Rules, a person is not a
Connected Customer of a Member if that person is (1) acting in its capacity as
the Operator of a Collective Investment Scheme or (ii) an investment trust.
Customer
Means any person with whom the Member carries on, or proposes to carry
on, Investment Business, but a person, who as a beneficiary under a trust (not
being the settlor himself) benefits from the performance by the Member as the
trustee of any activities which constitute Investment Business falling within
paragraphs 14 or 16 of Schedule 1 to the Act, shall not merely by reason of that
fact be included in the definition of Customer.
Associate
In relation to a person, means:-
(a) a partner of that person, or;
(b) an Appointed Representative of that person, or;
(c) a Connected Company of that person, or;
(d) where the person is a company,
(i) a Controller of that person, or;
(ii) an Officer of that person.
<PAGE>
Controller
(a) In relation to a Body Corporate, means a person, who
alone or with any Associate or Associates, is
entitled to exercise, or control the exercise of, 15
per cent. or more of the voting power at any general
meeting of the Body Corporate or another Body
Corporate of which it is a Subsidiary; and
(b) in relation to an unincorporated association means:-
(i) any person in accordance with whose directions
or instructions, either alone or with those of
any Associates, the officers or members of the
governing body of the association are
accustomed to act (but disregarding advice
given in a professional capacity); and
(ii) any person who, either alone or with any
Associate or Associates, is entitled to
exercise, or control the exercise of, 15 per
cent. or more of the voting power at any
general meeting of the association,
and for the purposes of this definition 'Associate', in relation
to any person, means that person's wife, husband or minor child
or step-child, any body corporate of which that person is a
director, any person who is an employee or partner of that person
and, if that person is a body corporate, any subsidiary of that
body corporate and any employee of any such subsidiary.
<PAGE>
Schedule 6
RISK DISCLOSURE STATEMENT
1. This statement is made in compliance with the IMRO Rules.
2. Under Clause 7.4 of this Agreement the Services may relate to Options,
Futures or Contracts for Differences or to Margined Transactions.
2.1 You are hereby warned that the markets can be highly volatile and that
investments in options, futures or contracts for differences carry a
high risk of loss; further that in the case of futures, contracts for
differences and the grant of options a relatively small adverse market
movement may result not only in loss of the original investment but
also in unquantifiable further loss exceeding any margin deposited.
2.2 Your attention is also drawn to the further warnings and points set out
in the appendices to this Schedule.
3. You are warned that if a liability in one currency is to be matched by
an asset in a different currency or if the Services may relate to an
investment denominated in a currency other than sterling then a
movement of exchange rates may have a separate effect unfavourable as
well as favourable on the gain or loss otherwise experienced on the
investment.
4. The Services may relate to Investments Not Readily Realisable and you
are warned that the same are not readily realisable that there can be
no certainty market makers will be prepared to deal in them and that
proper information for determining their current value may not be
available.
<PAGE>
APPENDIX I
GENERAL RISK DISCLOSURE STATEMENT
This statement is made in compliance with the rules of the Securities and
Investments Board ("the SIB").
The risk of loss in investing in commodity, financial or other futures, options
or contracts for differences can be substantial. You should carefully consider
whether such investments are suitable for you in the light of your
circumstances and financial resources. You should be aware of the following
points:-
1. In a relatively short time you may sustain a total loss of the deposits
and of the margin placed with your broker to establish or maintain an
open position if the market moves against you. You may be called upon
to deposit a substantial additional margin, at short notice, to
maintain your position. If you do not provide such additional funds
within the time required, your position may be liquidated at a loss and
you will be liable for any resulting deficit.
2. If you deposit collateral as security for calls made upon you by your
broker it will lose its identify as your property once dealings on your
behalf are undertaken and may be passed to an exchange's clearinghouse
or other brokers. Even if your dealings should ultimately prove
profitable, you may have to accept payment in cash and not get back the
actual assets which you have deposited. Nor will your deposit be
protected to the same extent as would a cash deposit held on trust in a
segregated client bank account.
3. Under certain market conditions it may be difficult or impossible to
liquidate a position. This may occur, for example, at times of rapid
price movement if the price rises or falls in one trading session to
such an extent that, under the rules of the relevant exchange, trading
is suspended or restricted.
4. Placing a stop-loss order will not necessarily limit your losses to the
intended amounts, for market conditions may make it impossible to
execute such orders at the stipulated price.
5. A spread or straddle position mav be as risky as a single long or short
position and can be more complex.
6. Markets in futures, options and contracts for differences can be highly
volatile and investment in them carries a high risk of loss. The high
degree of "gearing" or "leverage" is a particular feature of this type
of transaction. This stems from the margining system applicable to such
contracts which generally involves a comparitively modest deposit or
margin in terms of the overall contract value, so that a relatively
small market movement can have a disproportionately dramatic effect on
your investment. If the market movement is in your favour, you may
achieve a good profit return, but an equally small adverse market
movement can result not only in the loss of your entire original
investment, but may also expose you to the distinct possibility of an
unquantifiable loss exceeding your original investment.
<PAGE>
7. If you take (buy) an option, your risk in most cases will be less than
trading in futures since you should not lose more than the premium you
paid plus any commission or other transaction charges. However, there
are many different types of options with different peculiarities and
subject to different conditions. You should accordingly require your
broker to inform you of all relevant details before committing
yourself. In all cases you can easily lose your entire investment in
the option.
If you grant (sell) an option, your risk of loss may be at least as
great as your exposure in trading futures. Although you will receive a
premium payment for granting (selling) the option, a relatively small
adverse market movement can quickly eradicate that premium. You may be
liable to pay substantial additional margins which could involve you in
significant losses. Moreover, the buyer of an option acquires
certain rights which may limit your ability to protect yourself. Only
experienced traders should contemplate granting options and then only
after securing full details from their broker of the applicable
conditions and potential risk exposure.
8. Unless you have effectively agreed otherwise in circumstances where
this is permitted under the rules of the SIB when your broker deals for
you he should do so only in contracts of the types dealt with on one of
the recognised or designated exchanges. You instruct your broker to
deal on foreign markets, he will probably instruct a broker in the
country concerned. Normally that broker will not be subject to the
rules or regulations of the SIB and the exchange on which he effects
the transaction may not be subject to as strict regulations as a
recognised investment exchange in the United Kingdom. Hence the degree
of protection afforded to you may be less than if you restrict your
transactions to the United Kingdom markets. You should ensure that your
broker explains the protections which will operate and ascertain
whether he accepts liability for any default of the foreign broker that
he employs. If he does not accept such a liabibility you could lose all
that you have invested or stand to gain if the foreign broker defaults.
9. You should require of your broker prior to the commencement of trading
written confirmation of all commission and other transaction charges
for which you will be liable. In the event that any charges are not
expressed in money terms (but, for example, as a percentage of contract
value) you should obtain a clear written explanation, including
appropriate examples, to establish what such charges are likely to mean
in specific money terms. You should realise that when commission is
charged as a percentage it will normally be as a percentage of the
total contract value and not simply a percentage of your deposit.
<PAGE>
10. Brokers may also be dealers trading for their own account and they
may accordingly be involved in the same markets as you. Under such
circumstances you should be aware that their own account involvement
could be contrary to your interest. Your broker is required to inform
you in advance if he deals on his own behalf in relevant markets.
11. The guarantee of performance by the exchanges' clearing houses applies
only to their contracts with members. They do not guarantee performance
of your broker's contracts with you.
12. Your broker's insolvency or that of any other brokers involved may lead
to your positions being closed out without your consent.
*13. Your broker is required to hold your money in segregated trust accounts
in accordance with the regulations of the SIB but this may not afford
complete protection.
**14. You have agreed that your money held by your broker need not be
segregated in a client bank account and you will lack that protection
should your broker become insolvent.
This brief statement cannot disclose all risks of investments in
futures, options and contracts for differences. They are not suitable
for many members of the public and you should carefully study such
investments before you commit funds to them. They may also have tax
consequences and on this you should consult your lawyer, accountant or
other tax adviser.
*Delete if statement given to a business, professional or experienced
investor who has opted out of segregation in accordance with the rules
of the SIB.
**Delete unless statement given to a business, professional or
experienced investor who has opted out of segregation in accordance
with the rules of the SIB.
..............................................................................
FINSBURY ASSET MANAGEMENT LIMITED
I have read and understand Part 1 of this risk disclosure statement set out
above.
Date..........................................................................
Signature of on behalf of
<PAGE>
APPENDIX II
ADDITIONAL RISK DISCLOSURE STATEMENT
This statement is made in compliance with the rules of the Securities and
Investments Board ( "the SIB") because you have authorised your broker to deal
with or for you in futures, options or -contracts for differences which are not
undertaken under the rules of a recognised or designated investment exchange and
in contracts traded thereon. Its purpose is to warn you of the risks,
additional to those referred to in the General Risk Disclosure Statement,
inherent in such dealings.
1. In general it is only if you are a business, professional or experienced
investor within the meaning of the Board's rules and have agreed to be
treated as such that your broker will be entitled to undertake such
dealings with or for you. There are only three other circumstances in
which this is permissible subject to your agreement:-
(a) if the dealings are undertaken under a limited liability
transaction (see the General Risk Disclosure Statement) and your
broker has required you to deposit with him a sum in cash
equivalent to the amount of your limited liability prior to the
entry into the transactions, or
(b) if your broker carries on investment business only as an
"execution-only dealer", acts only on your unsolicited
instructions and offers no advice or recommendations of any
kind, or
(c) your broker is managing your investment portfolio under an
agreement which provides that such transactions may be entered
into but only with a view to protecting against possible adverse
fluctuations in the value of other investments or cash in the
Portfolio.
Unless you are a business, professional or experienced investor or
one or more of circumstances (a), (b) and (c) apply your broker will
not be entitled to undertake such transactions with or for you.
2. Such transactions may involve you in substantially greater risks than
you might incur by investing in futures, options or contracts for
differences under the rules of a recognised or designated investment
exchange and in contracts of a type traded thereon.
3. There is no regulated market in such contracts and the bid and offer
prices will be established solely by dealers in these contracts. Hence
you may not be able to sell what you have bought or buy what you have
sold or to ascertain whether you are doing so at a fair price.
<PAGE>
4. Before entering into any such transaction you should obtain from your
broker a written explanation as to how dealing is to be conducted, the
nature of the contracts offered, the facilities which will be made
available to you and the applicable procedures for entering into and
liquidating transactions, the method of calculating prices and other
relevant material. This you should study carefully, in conjunction with
the General Risk Disclosure Statement and this Additional Risk
Disclosure Statement. You should satisfy yourself that dealing is
conducted throughout in strict conformity with that written explanation
and report to the SIB if you have reason to believe it is not (The
Securities and Investments Board, 3 Royal Exchange Buildings, London,
EC3V 3NL Tel: 283 2474).
5. If you deal in contracts which are traded solely by one dealer you will
have no alternative other than to liquidate your position with the same
dealer and to accept the price he offers. You should ensure that this
price will be based on objective criteria and that your broker
undertakes that deals will be done at that price.
*6. You are also reminded that if you have agreed that your money held by
your broker need not be segregated in a client bank account you will
lack that protection should your broker become insolvent.
**7. Your money will be held by your broker in a special client bank account
for client money relating to such transactions notwithstanding that you
may be a business, professional or experienced investor willing to
contract out of segregation.
* Delete if the firm is an execution-only dealer
** Delete if the firm is not an execution-only dealer
..............................................................................
FINSBURY ASSET MANAGEMENT LIMITED
I have read and understood the Additional Risk Disclosure Statement set out
above.
Date 7th July 1989 .......................................................
Signature of
on behalf of
<PAGE>
APPENDIX III
RISK DISCLOSURE STATEMENT
This statement is made in compliance with the rules of the Securities and
Investments Board ("the SIB").
1. There are many different types of options with different peculiarities
and subject to different conditions. You should accordingly require
your broker to inform you of all relevant details before committing
yourself. If you take (buy) an option, the extent of your risk should
not be more than the amount of the premium you paid plus any commission
or other transaction charges. However, if you write or grant (sell) an
uncovered option, your risk of loss may be considerable. Although you
will receive a premium payment for selling the option, a relatively
small adverse market movement can quickly eradicate that premium. You
may be liable to pay subtantial additional margins which could
involve you in significant losses. You may be obliged to make or take
delivery of the underlying investment. Moreover, the buyer of an option
acquires certain rights which may limit your ability to protect
yourself. Only experienced persons should contemplate selling options
and then only after securing full detils from their broker of the
applicable conditions and potential risk exposure.
2. If you are required to deposit collateral as security with your broker
in respect of your options transactions, the way in which it will be
treated will vary widely according to the type of option and where it
is traded. If you trade options on a recognised or designated
investment exchange, the rules of that exchange and its clearing house
are likely to apply, but entirely different practices and conditions
are likely to be applicable in the case of off-exchange options. You
are strongly advised in either case to ascertain from your broker prior
to entering into the transaction how your collateral will be dealt
with, whether or not it will retain its identity as your property, and
under what circumstances you may be called upon for additional
collateral or other forms of security deposit.
3. Under certain market conditions it may be difficult or impossible to
liquidate positions. This may occur, for example, at times of rapid
price movement if the price rises or falls in one trading session to
such an extent that, under the rules of the relevant exchange, trading
is suspended or restricted.
4. A spread or straddle position may be as risky as a single long or short
position and can be more complex.
5. Unless you have effectively agreed otherwise in circumstances where
this is permitted under the rules of the Board when you broker deals
for you he should do so only in contracts of the type dealt with on one
of the recognised or designated Exchanges. If you instruct your broker
to deal on foreign markets, he will probably instruct a broker in the
country concerned. Normally that broker will not be subject to the
rules or regulations of the SIB and the exchange on which he effects
the transaction may not be subject to as strict regulations as a
recognised investment exchange in the United Kingdom. Hence the degree
of protection afforded to you may be less than if you restrict your
transactions to the United Kingdom markets. You should ensure that your
broker explains the protections which will operate and ascertain
whether he accepts liability for any default of the foreign broker that
he employs. If he does not accept such a libility you could lose all
that you have invested or stand to gain if the foreign broker defaults.
<PAGE>
6. You should require from your broker prior to the commencement of
trading written confirmation of all commission and other transaction
charges for which you will be liable. In the event that any charges are
not expressed in money terms (but, for example, as a percentage of
contract value) you could obtain a clear written explanation, including
appropriate examples, to establish what such charges are likely to mean
in specific money terms.
7. Brokers may also be dealers trading for their own account and they may
accordingly be involved in the same markets as you. Under such
circumstances you should be aware that their own account involvement
could be contrary to your own interests. Your broker is required to
inform you in advance if he deals on his own behalf in relevant
markets.
8. The guarantee of performance by the exchanges' clearing houses applies
only to their contracts with members. They do not guarantee performance
of your contracts.
9. Your broker's insolvency or that of any other firm involved in the
transaction may lead to your positions being closed out without your
consent.
*10. Your broker is required to hold your money in segregated trust accounts
in accordance with the regulations of the SIB but this may not afford
complete protection.
**II. You have agreed that your money held by your broker need not be
segregated in a client bank account and you will lack that protection
should your broker become insolvent.
* Delete if statement given to a business, professional or experienced
investor who has opted out of segregation in accordance with the rules
of the SIB.
<PAGE>
** Delete unless statement given to a business, professional or
experienced investor who has opted out of segregation in accordance
with the rules of the SIB.
..............................................................................
FINSBURY ASSET MANAGEMENT LIMITED
I have read and understood the risk disclosure statement set out above.
Date 7th July 1989 ..................................................
Signature of
on behalf of
<PAGE>
APPENDIX IV
STABILISATION
This statement is made in compliance with rules of the Securities and
Investments Board.
Finsbury Asset Management Limited or its representatives may from time to time
recommend to you or effect on your behalf transactions in securities the
subject of a recent new issue the price of which transactions may have been
influenced by bids made or transactions effected for the purpose of
stabilising the price of those securities. You should read the explanation
below carefully. Its purpose is to enable you to judge whether you wish your
funds to be invested at all in such securities and, if so, whether you wish to
authorise name of firm generally to effect transactions in such securities on
your behalf without further reference to you or whether you wish to be
consulted before any particular transaction is effectd on your behalf.
Stabilisation is a process whereby the market price of a security is
pegged or fixed during the period in which a new issue of securities is sold
to the public. Stabilisation may take place in the new issue or in other
securities related to the new issue in such a way that the price of the other
securities may effect the price of the new issue or vice versa.
The reason stabilisation is permitted is that when a new issue is brought to
market the sudden glut will sometimes force the price lower for a period of
time before buyers are found for the securities on offer.
As long as he obeys a strict set of rules the "stabilising manager", normally
the issuing house chiefly responsible for bringing a new issue to market, is
entitled to buy securities in the market that he has previously sold to
investors or alloted to institutions who were included in the new issue but
who have decided not to continue participating. The effect of this may be to
keep the price at a higher level than would otherwise be the case during the
period of stabilising.
These rules limit the period in which he may stabilise, fix the price at which
he may stabilise (in the case of shares and warrants but not bonds) and
require him to disclose that he may be (but not that he is) stabilising.
The fact that a new issue or a related security is being stabilised does not
in itself mean that investors are not interested in the issue, but neither
should the existence of transactions in an issue where stabilising may take
place be relied upon as an indication that investors are interested in the
new issue or interested in purchasing at the price at which transactions are
taking place.
<PAGE>
The following is a summary of all omitted Schedules to the foregoing FTP
Management Agreement.
Schedule 1 Initial Portfolio Valuation.
The Registrant hereby agrees to furnish supplementally to the
Commission a copy of Schedule 1 upon request of the Commission.
<PAGE>
EXHIBIT F
THIS AGREEMENT is made the 3rd day of April, 1992.
BETWEEN:
Ocean Wilsons Limited, a body corporate duly incorporated under the laws of
Bermuda, and having offices located at Clarendon House, Church Street, Hamilton,
Bermuda (hereinafter referred to as "OWL')
OF THE FIRST PART
-and-
Ocean Wilsons (Investments) Limited, a body corporate duly incorporated under
the laws of Bermuda, and having offices located at Clarendon House, Church
Street, Hamilton, Bermuda (hereinafter referred to as "OWIL")
OF THE SECOND PART
- and -
Finsbury Asset Management Limited, a body corporate duly incorporated under the
laws of England, having its offices at Neptune House, Triton Court, 14 Finsbury
Square, London (hereinafter referred to as "Finsbury")
OF THE THIRD PART
NOVATION AGREEMENT
------------------
PREAMBLE
- --------
WHEREAS OWL and Finsbury are parties to that certain portfolio
management agreement dated the 31st day of March 1992, a copy of which agreement
is attached as a schedule hereto (the "Portfolio Agreement");
AND WHEREAS each of the parties hereto wish to novate the Portfolio
Agreement so that OWIL assumes the benefits and agrees to bear the burdens
previously undertaken by OWL under the Portfolio Agreement;
<PAGE>
N0W THEREFORE THIS AGREEMENT WITNESSETH that in consideration of The
mutual covenants and agreements herein contained, the parties do hereby mutually
covenant and agree as follows:
ARTICLE I
- ----------
1.1 Novation
Each of OWIL and Finsbury agree to novate the Portfolio Agreement so
that any reference to OWL therein shall, from the date of this Novation
Agreement instead be read so as to refer to OWIL, and the terms thereof shall be
amended accordingly.
1.2 OWIL to be Bound
In consideration of the sale and transfer of certain assets from OWL to
OWIL concurrently with this Novation Agreement, and the mutual covenants herein
contained, OWIL agrees to undertake and fulfill all of the obligations of OWL
under the Portfolio Agreement and shall be entitled to all of the benefits
formerly enjoyed by OWL thereunder.
1.3 Preamble
The parties hereby confirm and ratify the matters contained and
referred to in the preamble to this Agreement and agree that the same are
expressly incorporated into and form part of this Agreement.
ARTICLE II
- ----------
2.1 Further Assurances
The parties hereto and each of them do hereby covenant and agree to do
such things and execute such further documents, agreements and assurances as may
be necessary or advisable from time to time in order to carry out the terms and
conditions of this Agreement in accordance with their true intent.
2.2 Headings
The headings in this Agreement have been inserted for reference and as
a matter of convenience only and in no way define, limit or enlarge the scope or
meaning of this Agreement or any provisions hereof.
2.3 Singular, Plural and Gender
Wherever the singular, plural, masculine, feminine or neuter is used
throughout this Agreement the same shall be construed as meaning the singular,
plural, masculine, feminine, neuter, body politic or body corporate where the
fact or context so requires and the provisions hereof and all covenants herein
shall be construed to be joint and several when applicable to more than one
party.
<PAGE>
2.4 Governing Law
This agreement shall be construed, enforced and governed by the laws of
England without regard to any conflicts of laws rules which would make the laws
of another jurisdiction applicable.
2.5 Counterparts.
This Agreement may be entered into in any number of counterparts and by
the parties to it on separate counterparts each of which when so executed and
delivered shall be an original but all counterparts shall together constitute
one and the same agreement.
2.6 Submission to Jurisdiction
In relation to any dispute arising out of or in connection with this
Agreement, the parties irrevocably and unconditionally submit to the
non-exclusive jurisdiction of the Courts of England and Bermuda and, to the
extent permitted by law, hereby waives any objection to proceedings with respect
to this Agreement in such courts on the grounds of venue or inconvenient forum.
IN WITNESS WHEREOF the corporate parties have hereunto affixed their
corporate seals duly attested to by the hands of their properly authorized
officers in that behalf all on the day and year first above written.
Ocean Wilson (Investments) Limited
Per: /s/ SEAL
------------------------------------
Per: /s/
------------------------------------
Ocean Wilsons Limited
Per: /s/ SEAL
------------------------------------
Per: /s/
------------------------------------
Finsbury Asset Management Limited
Per: /s/
------------------------------------
Per: /s/
------------------------------------
<PAGE>
To: OCEAN WILSONS LIMITED ("the Customer")
of Clarendon House, Church Street, Hamilton HM11, Bermuda
INTRODUCTION
- ------------
1. We are a member of the Investment Management Regulatory Organisation
("IMRO") and as such regulated by IMRO in the conduct of investment business (as
defined in the Financia1 Services Act 1986 ("the Act")) and are bound by the
rules including any regulations made by the Board of IMRO as altered, amended,
added to or cancelled from time to time ("the IMRO Rules")
2. We, have been informed by you and believe that you carry on business
as an investment holding Company and are an Ordinary Business Investor as
defined in the IMRO rules and wish us to provide you with certain investment
management services on that basis (including but not limited to advising on and
managing Investments Within the meaning of the Act) and details of which
services are set out in paragraphs 7, 8 and 9 ("the Services") which we are
pleased to agree to provide on the terms and subject to the conditions of this
Agreement and the Schedules which form part of this Agreement.
The Services will be provided on the basis that you are a non-private
Investor and in consequence you will not obtain the benefit of certain of the
IMRO Rules.
APPOINTMENT
- -----------
3. We are hereby appointed as your sole Investment Managers with effect
from close of business in the United Kingdom on 31st March 1992. Our appointment
shall continue in full force and effect unless and until terminated in
accordance with paragraph 5.1 below.
4. We reserve the right to perform our obligations through and/or delegate
any of our discretions to the agency of any subsidiary, associated company or
<PAGE>
any third party of our choosing provided that we have obtained the prior written
consent of the Board of Directors for the time being of your Company ("the
Board") so to do and that such transaction will ensure "best execution".
TERMINATION AND VARIATION
- -------------------------
5.1 Our appointment may be terminated by either of us giving to the other
not less than 20 calendar months written notice at any time or such shorter
notice as the other may agree to accept. Any termination of this Agreement shall
be without prejudice to the completion by us of any transactions already
initiated (which transactions shall proceed on the terms of this Agreement
notwithstanding its termination) and any antecedent liability of either party
(including liabilities in respect of transactions continuing after termination
in accordance with this paragraph)
5.2 This Agreement may only be varied by written agreement signed by both
parties.
DISCLOSURE
- ----------
6.1 We specifically draw your attention to the disclosure that certain of
our customers are "Controllers" and some of our customers are Associates within
the meaning of the IMRO Rules and to the other statements contained in Schedule
4.
6.2 Your attention is also drawn to the warnings and statements set out in
Schedule 6 and appendices thereto.
6.3 The validity of this Agreement shall not be impeached on the grounds of
Schedule 4 or Schedule 6.
<PAGE>
THE SERVICES
- ------------
7.1 The Services undertaken by us under this Agreement shall be subject to
the Investment Limitations ("the Investment Limitations") set out in Schedule 2
(which may be amended by written notice from you to us from time to time) and to
the policies, direction and control of the Board which will define your
investment and other policies from time to time.
7.2 Unless and until we are otherwise instructed by the Board, we shall
have full discretion to manage all investments and funds within your portfolio
from time to time ("the Portfolio") and shall advise the Board as we consider
appropriate in accordance with the Investment Objectives ("the Investment
Objectives") set out in Schedule 2 (which Investment Objectives may be amended
by written notice from you to us from time to time) or as the Board may require
but otherwise (save as provided in paragraph 7.1 above) may act without
restriction, and in particular as to the types of investment, the markets in
which investments are made, the amount of any one investment and the proportion
of the Portfolio which any one investment or any particular kind of investment
may contribute. Particulars of the Portfolio as at the date of this Agreement
and of the initial values thereof are set out in Schedule 1.
7.3 We shall effect the investment and re-investment of the Portfolio
including by way of underwriting participation and the income arising therefrom
in accordance with your Memorandum and Articles of Association and the
investment policies of the Board and arrange for the transfer of investments
into your name or the name of your nominee.
7.4 Unless and until you notify us in writing not to do so without a
further Agreement, the Services will include advising on or effecting
transactions relating to Contingent Liability Transactions.
<PAGE>
7.5 We wi11 inform you in writing, in relation to any transaction we effect
with or for you:-
7.5.1 if commission mark up or mark down will be payable otherwise than by
you to us or at our direction or to or at the direction of any of our
Associates;
7.5.2 if we will also be remunerated by the other party to the transaction
7.5.3 if the transaction relates to securities which have been the subject of
a primary or secondary offer thereof made within six months next before the
date on which the transaction is effected and we or any of our Associates
provided underwriting or other services in connection with that offer.
7.6 All transactions to be effected for you with or through the agency of
a person who provides services under any Soft Commission Agreement will be
effected so as to secure for you best execution of the transaction disregarding
any benefit which might enure directly or indirectly to you from the service or
benefits provided under that arrangement. There are no Soft Commission
Agreements at the date of this Agreement.
7.7 If so required by the Board we shall procure that one of our senior
officers or employees shall attend up to (but not exceeding) four meetings of
the Board in Bermuda in each year during which our appointment remains in force,
for the purposes of reporting to the Board in relation to the conduct of our
duties hereunder, provided that reasonable prior notice of each such meeting
shall be given to us and you shall bear and pay all reasonable travel and
accommodation and subsistence costs of the representative of ours who is to
attend the Board meeting in question and provided further that we shall not be
entitled to any further remuneration in respect of such attendances.
<PAGE>
POWERS
- ------
8.1 Unless and until otherwise agreed between us in the performance of our
obligations under this Agreement we:-
8.1.1 may enter into make and perform all such contracts agreements and other
undertakings as may in our opinion be necessary or adviseable or incidental to
the carrying out of the Investment Objectives;
8.1.2 may exercise on your behalf all voting and other rights attaching to or
involved in the holding of investments as we in our absolute discretion consider
appropriate and unless otherwise directed by written instructions from the Board
PROVIDED ALWAYS THAT where any investment comprised in the Portfolio either
singly or when aggregated with investments held in the Portfolio of any other
company managed by us carries 3 per cent (or such other percentage as may from
time to time be prescribed in relation to notifiable interests under the
Companies Act 1985 of the United Kingdom) or more of all the voting rights of
any class of share in the share capital of that company which are from time to
time exercisable at general meetings of any company we shall only act in
accordance with the written instructions of the Board before exercising any
voting or other rights attached to or involved in such holdings or any part
thereof;
8.1.3 shall be entitled to obtain and/or act or rely upon the opinion or
advice of or any information received from any broker, lawyer, valuer, surveyor
or other expert whether reporting to you or to us;
8.1.4 shall not be precluded from contracting or entering into any financial
or other transaction with you and in the case of any transaction being in
respect of any Investment shall be entitled to deal at a net price computed
after taking into account our costs and expenses arising out of or in connection
with such transaction;
<PAGE>
8.1.5 may buy Shares in any company whose Investments or assets we manage
without your prior consent;
8.1.6 commit you to an obligation to underwrite any issue or offer for sale
of securities provided that the Board may from time to time by written notice
to us impose restrictions (which shall be observed by us) on the categories of
securities or financial limits on the extent of such underwriting, the initial
such restrictions being shown on Schedule 2;
8.1.7 may at our discretion and in all circumstances commit you (subject to
the limits on the extent to which this may be done imposed by the Board by
written notice to us from time to time which limits shall be observed by us,
the initial such limits being shown on Schedule 2) to supplement the funds in
the Portfolio either by borrowing on your behalf or committing you to a
contract the performance of which may require you to supplement such funds or
to a Contingent Liability Transaction whereby you may be required to pay a
deposit or margin in support of that transaction, or to supplement that payment
after the transaction has been effected.
8.2 We shall do all such things to enable you to comply with your
obligations under any regulatory rules regarding Investments.
8.3 We shall not be liable for the consequences of any investment decision
made within the Investment Objectives but we agree to indemnify you in respect
of loss incurred as a result of gross negligence, wilful default or fraud by us
or any of our employees. We shall not be liable for the default of any
custodians or bankers.
<PAGE>
8.4 We shall have the right for ourselves, our representatives and
employees to make unsolicited calls on you at any time at our discretion and may
send you any research and communicate to you any specific recommendations in any
manner.
ADMINISTRATION
- --------------
9.1 Unless otherwise agreed in writing we shall not hold any of your
Investments or money or any documents of title relating thereto, but will lodge
the same with bankers nominated by you in writing from time to time for safe
custody or for the credit of your relevant bank account as the case may be. If
we at any time hold any money for you (which we do not intend to do) such money
will not be segregated in a client bank account.
9.2 We shall have power to give instructions to such bankers to effect all
settlements and transactions and shall have a limited mandate in relation to
the operation of your relevant account.
9.3 We shall use reasonable endeavours to procure that such brokers as we
may from time to time appoint will forward to you copies of all contract notes
dividend tax vouchers and other advices issued or received by them showing
income received, the basis of fees and commissions charged and transactions
entered into.
9.4 We shall supply the Board quarterly with a valuation of the Portfolio
(and more frequently if required by the Board) provided that such valuations,
other than the quarterly valuations, shall be at your expenses.
9.5 It shall not be our responsibility to collect income or reclaim income
Tax from the Inland Revenue.
9.6 We may aggregate your transactions with those of our other clients
(including our Associates) without prior agreement.
<PAGE>
REMUNERATION, FEES AND EXPENSES
- -------------------------------
10. Our fees and charges are calculated on this basis and at the rates shown
in Schedule 3.
INDEMNITY INSURANCE
- -------------------
11. We do not maintain indemnity insurance.
COMPLAINTS PROCEDURE
- --------------------
12.1 Any Complaints regarding any alleged breach or non-observance of any of
our obligations contained in this Agreement of which you may at any time become
aware should be made in writing to our Compliance Officer who will promptly
acknowledge your letter, notify our Chairman and investigate the circumstances
(which may involve your supplying any necessary information and your general
co-operation) and will report the results to you.
12.2 If a complaint remains unresolved between ourselves we will supply you
with a copy of the IMRO complaints procedure and you may approach IMRO and the
Securities and Investments Board direct.
CONFIDENTIALITY
- ---------------
13.1 Both parties will at all times respect and protect the confidentiality
of information acquired as a result of this Agreement except as required by law
by way of disclosure to any competent regulatory body or authority.
13.2 It may be necessary in order to comply with paragraph 12.1 to supply
such information to a body outside the United Kingdom in which event we will
notify you and any expenses so incurred will forthwith be reimbursed by you.
<PAGE>
INTERPRETATION
- --------------
14. In this Agreement (and in the Schedules hereto) unless the context
otherwise requires words and expressions defined in the Definitions Schedule to
IMRO Rules (a copy of which is annexed as Schedule 5) shall have the same
meaning herein.
VALIDITY
- --------
15.1 In the event that any provision of this Agreement shall finally be
determined to be unlawful in accordance with English law such provision shall be
deemed severed therefrom but every other provision thereof shall remain in full
force and effect unless the business purpose of this Agreement is frustrated
thereby.
15.2 If any conflict shall arise between the provisions of this Agreement and
the IMRO Rules then the IMRO Rules shall prevail.
APPLICABLE LAW AND JURISDICTION
- -------------------------------
16. This Agreement shall be governed and construed in accordance with
English law, and by our signatures hereto each of us shall be deemed to have
submitted and consented to the non-exclusive jurisdiction of the Courts of
England.
Kindly acknowledge receipt of this Agreement and confirm your acceptance of
these terms and conditions by signing the attached copy and returning it to us
marked for the attention of the Company Secretary.
Dated the day of 1992
<PAGE>
Signature of
on behalf of FINSBURY ASSET MANAGEMENT LIMITED
<PAGE>
We acknowledge receipt of the Agreement of which this is a copy and confirm we
are a Non-private Customer and our acceptance of the terms and conditions
set-out in such Agreement.
Dated the 31st day of March 1992.
Signature of )
on behalf of OCEAN WILSONS LIMITED )
<PAGE>
SCHEDULE 2
----------
INVESTMENT OBJECTIVES
---------------------
(which are subject to amendment by the Board from
time to time)
The maximisation of total return on capital invested through either capital
gain or income as investment opportunities present themselves.
INVESTMENT LIMITATIONS
----------------------
(which are subject to amendment by the Board from
time to time)
Excluded Investments: Life Policies
Unit Trusts
PEPS
Collective Investment Schemes
Underwriting
The Customer's financial exposure in underwriting any issue or offer for sale
of securities shall be limited to L1,000,000 in respect of any one issue or
offer for sale unless prior approval of the Board be obtained.
The commitment contemplated in clause 8.1.7 of the Agreement to which this is
Schedule 2 shall not exceed Lnil unless prior approval of the Board be obtained.
<PAGE>
SCHEDULE 3
----------
Remuneration. Fees, Expenses and Indemnity
1. Our fees and charges by way of remuneration for the services pursuant to
this Agreement are levied and payable on the following basis:-
1.1 On the date of each valuation ("the relevant Valuation Date") a fee
shall be payable by you equal to that proportion of 0.75 per cent of
the total value of the Portfolio (for the avoidance of doubt,
disregarding any borrowings associated with any holdings in the
Portfolio) as at that relevant Valuation Date which the number of days
from the immediately preceding Valuation Date (or in the case of the
first valuation after the date of this Agreement from such date) to the
relevant Valuation Date bears to 365. We shall he entitled to debit
such fee directly to your account with your bankers from time to time.
1.2 A valuation of the Portfolio shall be made as at the date on which this
Agreement is terminated and you shall pay us a fee calculated as
provided in 1.1 above by reference to such valuation. Such valuation
shall include any investments the subject of uncompleted sales but shall
exclude the value of any investments represented by uncompleted
purchases.
1.3 For the purposes of this clause "the Portfolio" shall exclude a holding
by you on or your behalf in any investment trust company (as defined in
Section 842 Income & Corporation Taxes Act, 1988 in the United Kingdom)
of which we are for the time being sole investment manager. For the
avoidance of doubt "the Portfolio shall include a holding by you or on
your behalf in any of Rea Brothers Group Plc, or Adam + Harvey
<PAGE>
Group PLC.
2. We shall be entitled to be reimbursed on demand all expenses (including
the fees of any advisers appointed pursuant to paragraph 8.1.3) properly
incurred in the performance of our obligations. Where we in acting in our
capacity as your investment manager enter into commitments or incur expenses on
your behalf any consequent liabilities (other than such as may arise from the
wilful default, gross negligence or fraud on our part) shall either be met by
you direct or we shall be entitled to use any of your funds under our
administrative control to discharge such liabilities and to the extent that we
shall make any payment on your behalf or incur or suffer any liability,
obligation, loss, damage, penalty, judgment, cost or expense of any kind
whatsoever acting in such capacity aforesaid we shall (except as aforesaid) be
fully indemnified and held indemnified in respect thereof by you.
<PAGE>
The following is a summary of all omitted Schedules and Appendices to the
foregoing Ocean Management Agreement.
Schedule 1 Initial Portfolio Valuation.
Schedule 4 Disclosure Statement (filed as Schedule 4
to Exhibit F to this Schedule 13D).
Schedule 5 Definitions (filed as Schedule 5 to Exhibit
F to this Schedule 13D).
Schedule 6 Risk Disclosure Schedule (filed as Schedule
6 to Exhibit F to this Schedule 13D).
Appendix I General Risk Disclosure Statement (filed
as Appendix I to Exhibit F to this Schedule
13D).
Appendix II Additional Risk Disclosure Statement
(filed as Appendix II to Exhibit F to this
Schedule 13D).
Appendix III Risk Disclosure Statement (filed as
Appendix III to Exhibit F to this Schedule
13D).
Appendix IV Stabilisation (filed as Appendix IV to
Exhibit F to this Schedule 13D).
The Registrant hereby agrees to furnish supplementally to the
Commission a copy of any of the above-listed Schedules or Appendices upon
request of the Commission.
<PAGE>
EXHIBIT G
Finsbury Asset Management Limited
Neptune House. Triton Court. 14 Finsbury Square. London EC2A 1BR
Telephone: 01-256 8873 Telex: 8958024 Fax: 01-638 0541
To: SCOTTISH CITIES INVESTMENT TRUST PLC
of Neptune House, Triton Court, 14 Finsbury Square, London EC2A 1BR
Introduction
1. We are a member of the Investment Management Regulatory Organisation ("IMRO")
and as such regulated by IMRO in the conduct of investment business (as defined
in the Financial Services Act 1986 ("the Act")) and are bound by the rules
including any regulations made by the Board of IMRO as altered, amended, added
to or cancelled from time to time ("the IMRO Rules")
2. We, have been informed by you and believe that you carry on business as an
approved investment trust and are a business Investor as defined in the IMRO
rules and set out in Schedule 5 and wish us to provide you with certain
investment management services on that basis (including but not limited to
advising on and managing Investments within the meaning of the Act) and details
of which services are set out in paragraphs 7, 8 and 9 ("the Services") which
we are pleased to agree to provide on the terms and subject to the conditions of
this Agreement and the Schedules which form part of this Agreement.
The Services will be provided on the basis that you are a business Investor
and in consequence you will not obtain the benefit of certain of the IMRO Rules.
Appointment
3. We are appointed as your sole Investment Managers with effect from the time
<PAGE>
of the receipt by us of the enclosed copy of this Agreement with the endorsed
confirmation of your acceptance signed by you. Our appointment shall continue in
full force and effect unless and until terminated in accordance with paragraph
5.1 below.
4. We reserve the right to perform our obligations through and/or delegate any
of our discretions to the agency of any subsidiary, associated company or any
third party of our choosing, provided that we have obtained the prior written
consent of the Board of Directors for the time being of your Company ("the
Board") so to do and that such transaction will ensure "best execution".
Termination and Variation
5.1 Our appointment may be terminated by either of us giving to the other in
January in any year not less than 12 months written notice or such shorter
notice as the other may agree to accept. Any termination of this Agreement shall
be without prejudice to the completion by us of any transactions already
initiated and any antecedent liability of either party.
5.2 This Agreement may only be varied by written agreement signed by both
parties.
Disclosure
6.1 We specifically draw your attention to the disclosure that certain of our
customers are "Controllers" and one of our customers is a Connected Customer
within the meaning of the IMRO Rules and to the other statements contained in
Schedule 4.
6.2 Your attention is also drawn to the warnings and statements set out in
Schedule 6 and appendices thereto.
6.3 The validity of this Agreement shall not be impeached on the grounds of
Schedule 4 or Schedule 6.
-2-
<PAGE>
The Services
7.1 We shall have full discretion to manage all investments and funds within
your portfolio from time to time ("the Portfolio") and shall advise the Board as
we consider appropriate in accordance with the Investment Objectives set-out
in Schedule 2 or as the Board may require but otherwise (save as provided in
paragraph 7.2 below) may act without restriction, and in particular as to the
types of investment, the markets in which investments are made, the amount of
any one investment and the proportion of the Portfolio which any one investment
or any particular kind of investment may contribute. Particulars of the
Portfolio as at the date of this Agreement and of the initial values thereof are
set out in Schedule 1.
7.2 The Services undertaken by us under this Agreement shall be subject to the
Investment Limitations set out in Schedule 2 and to the policies, direction and
control of the Board which will define your investment and other policies from
time to time.
7.3 We shall effect the investment and re-investment of the Portfolio including
by way of underwriting participation and the income arising therefrom in
accordance with your Memorandum and Articles of Association and the investment
policies of the Board and arrange for the transfer of investments into your
name or the name of your nominee.
7.4 Unless and until you notify us in writing not to do so without a further
Agreement, the Services will include advising on or effecting transactions
relating to Options, Futures, or Contracts for Differences or Margined
Transactions.
7.5 We will inform you in writing, in relation to any transaction we effect with
or for you:-
7.5.1 if commission mark up or mark down will be payable otherwise than by you
to us or at our direction or to or at the direction of any of our Associates;
-3-
<PAGE>
7.5.2 if we will also be remunerated by the other party to the transaction;
7.5.3 if the transaction relates to securities which have been the subject of
a primary or secondary offer thereof made within six months next before
the date on which the transaction is effected and we or any of our
Associates provided underwriting or other services in connection with
that offer.
7.6 All transactions to be effected for you with or through the agency of a
person who provides services under any Relevant Arrangements (as defined in Rule
6.01 of the IMRO Rules) will be effected so as to secure for your best execution
of the transaction disregarding any benefit which might enure directly or
indirectly to you from the service or benefits provided under that arrangement.
There are no Relevant Arrangements at the date of this Agreement.
Powers
8.1 Unless and until otherwise agreed between us in the performance of our
obligations under this Agreement we:-
8.1.1 may enter into make and perform all such contracts agreements and other
undertakings as may in our opinion be necessary or advisable or
incidental to the carrying out of the Investment Objectives;
8.1.2 may exercise on your behalf all voting and other rights attaching to or
involved in the holding of Investments as we in our absolute discretion
consider appropriate and unless otherwise directed by written
instructions from the Board;
8.1.3 shall be entitled to obtain and/or act or rely upon the opinion or
-4-
<PAGE>
advice of or any information received from any broker, lawyer,
valuer, surveyor or other expert whether reporting to you or to us;
8.1.4 shall not be precluded from contracting or entering into any financial
or other transaction with you and in the case of any transaction being
in respect of any Investment shall be entitled to deal at a net price
computed after taking into account our costs and expenses arising out
of or in connection with such transaction;
8.1.5 may buy Shares in any company whose Investments or assets we manage
without your prior consent;
8.1.6 commit you to an obligation to underwrite any issue or offer for sale
of securities without any restriction on the categories of securities
or financial limits on the extent of such underwriting; with the
exception of those referred to in Schedule 2.
8.1.7 may at our discretion and in all circumstances commit you (without
limit on the extent to which this may be done) to supplement the funds
in the Portfolio either by borrowing on your behalf or committing you
to a contract the performance of which may require you to supplement
such funds or to a transaction relating to Options, Futures or
Contracts for Differences whereby you may be required to pay a deposit
or margin in support of that transaction, or to supplement that payment
after the transaction has been effected.
8.2 We shall do all such things to enable you to comply with your obligations
under any regulatory rules regarding Investments.
8.3 We shall not be liable for the consequences of any investment decision made
within the Investment Objectives but we agree to indemnify you in respect of
loss incurred as a result of gross negligence, wilful default or fraud by us
-5-
<PAGE>
or any of our employees. We shall not be liable for the default of any
custodians or bankers.
8.4 We shall have the right for ourselves, our representatives and employees to
make unsolicited calls on you at any time at our discretion and may send you
any research and communicate to you any specific recommendations in any manner.
Administration
9.1 Unless otherwise agreed in writing we shall not hold any of your Investments
or money or any documents of title relating thereto, but will lodge the same
with bankers nominated by you in writing from time to time for safe custody or
for the credit of your relevant bank account as the case may be.
9.2 We shall have power to give instructions to such bankers to effect all
settlements and transactions and shall have a limited mandate in relation to the
operation of your relevant account.
9.3 We shall use reasonable endeavours to procure that such brokers as we may
from time to time appoint will forward to you copies of all contract notes
dividend tax vouchers and other advices issued or received by them
showing income received, the basis of fees and commissions charged and
transactions entered into.
9.4 We shall supply the Board quarterly with a valuation of the Portfolio and
more frequently if required by the Board the valuations other than the quarterly
valuations to be at your expense.
9.5 It shall not be our responsibility to collect income or reclaim Income Tax
from the Inland Revenue.
9.6 We may aggregate your transactions with those of our other clients
(including our Connected Customer) without prior agreement.
-6-
<PAGE>
Remuneration, Fees and Expenses
10. Our fees and charges are calculated on the basis and at the rates shown in
Schedule 3.
Indemnity Insurance
11. We do not maintain indemnity insurance.
Complaints Procedure
12.1 Any Complaints regarding any alleged breach or non-observance of any of our
obligations contained in this Agreement of which you may at any time become
aware should be made in writing to our Compliance Officer who will promptly
acknowledge your letter, notify our Chairman and investigate the circumstances
(which may involve your supplying any necessary information and your general
co-operation) and will report the results to you.
12.2 If a complaint remains unresolved between ourselves we will supply you
with a copy of the IMRO complaints procedure and you may approach IMRO and the
Securities and Investments Board direct.
Confidentiality
13.1 Both parties will at all times respect and protect the confidentiality of
information acquired as a result of this Agreement except as required by law by
way of disclosure to any competent regulatory body or authority.
13.2 It may be necessary in order to comply with paragraph 13.1 to supply such
information to a body outside the United Kingdom in which event we will notify
you and any expenses so incurred will forthwith be reimbursed by you.
-7-
<PAGE>
Interpretation
14. In this Agreement unless the context otherwise requires words and
expressions defined in the IMRO Rules shall have the same meaning herein.
Validity
15.1 In the event that any provision of this Agreement shall finally be
determined to be unlawful in accordance with English law such provision shall be
deemed severed therefrom but every other provision thereof shall remain in full
force and effect unless the business purpose of this Agreement is frustrated
thereby.
15.2 If any conflict shall arise between the provisions of this Agreement and
the IMRO Rules then such Rules shall prevail.
Kindly acknowledge receipt of this Agreement and confirm your acceptance of
these terms and conditions by signing the attached copy and returning it to us
marked for the attention of the Company Secretary.
Dated the 7th day of July 1989
Signature of
on behalf of FINSBURY ASSET MANAGEMENT LIMITED
-8-
<PAGE>
We acknowledge receipt of the Agreement of which this is a copy and confirm we
are a business Investor and our acceptance of the terms and conditions set-out
in such Agreement.
Dated the 7th day of July 1989.
Signature of )
on behalf of SCOTTISH CITIES )
INVESTMENT TRUST PLC. )
-9-
<PAGE>
SCHEDULE 2
INVESTMENT OBJECTIVES
The maximisation of total return on capital invested through either capital
gain or income as investment opportunities present themselves.
INVESTMENT LIMITATIONS
Excluded Investments: Life Policies
Unit Trusts
PEPS
Collective Investment Schemes
Underwriting
The company's financial exposure in underwriting any issue or offer for sale of
securities shall be limited to Ll,000,000 in respect of any one issue or offer
for sale unless prior approval of the board be obtained.
-11-
<PAGE>
SCHEDULE 3
Remuneration, Fees, Expenses and Indemnity
1. Our fees and charges by way of remuneration for the Services pursuant to this
Agreement are levied and payable on the following basis:-
1.1 On the date of each valuation ("the relevant Valuation Date") a fee
shall be payable by you equal to that proportion of 1/2 per cent of the
total value of the Portfolio (for the avoidance of doubt, disregarding
any borrowings associated with any holdings in the Portfolio) as at
that relevant Valuation Date which the number of days from the
immediately preceding Valuation Date (or in the case of the first
valuation after the date of this Agreement from such date) to the
relevant Valuation Date bears to 365. We shall be entitled to debit
such fee directly to your account with your bankers from time to time.
1.2 A valuation of the Portfolio shall be made as at the date on which
this Agreement is terminated and you shall pay us a fee calculated as
provided in 1.1 above by reference to such valuation. Such valuation
shall include any investments the subject of uncompleted sales but
shall exclude the value of any investments represented by uncompleted
purchases.
1.3 For the purposes of this clause "the Portfolio" shall exclude a holding
by you or on your behalf in any investment trust company (as defined in
Section 842 ICTA 1988) of which we are for the time being sole
investment manager where such holding represents 5% or more in nominal
value of the equity share capital of such company. For the avoidance of
doubt "the Portfolio" shall include a holding by you or on your behalf
in any of Rea Brothers Group Plc, Ocean Wilsons (Holdings) Plc,
or Stocklake Holdings Plc.
-12-
<PAGE>
2. We shall be entitled to be reimbursed on demand all expenses (including the
fees of any advisers appointed pursuant to paragraph 8.1.3) properly incurred in
the performance of our obligations. Where we acting in our capacity as your
investment manager enter into commitments or incur expenses on your behalf any
consequent liabilities (other than such as may arise from the wilful default,
gross negligence or fraud on our part) shall either be met by you direct or we
shall be entitled to use any of your funds under our administrative control to
discharge such liabilities and to the extent that we shall make any payment on
your behalf or incur or suffer any liability, obligation, loss, damage, penalty,
judgment, cost or expense of any kind whatsoever acting in such capacity
aforesaid we shall (except as aforesaid) be fully indemnified in respect thereof
by you.
-13-
<PAGE>
The following is a summary of all omitted Schedules and Appendices to the
foregoing FGT Management Agreement.
Schedule 1 Initial Portfolio Valuation.
Schedule 4 Disclosure Statement (filed as Schedule 4 to
Exhibit F to this Schedule 13D).
Schedule 5 Definitions (filed as Schedule 5 to Exhibit
F to this Schedule 13D).
Schedule 6 Risk Disclosure Schedule (filed as Schedule
6 to Exhibit F to this Schedule 13D).
Appendix I General Risk Disclosure Statement (filed
as Appendix I to Exhibit F to this Schedule
13D).
Appendix II Additional Risk Disclosure Statement
(filed as Appendix II to Exhibit F to this
Schedule 13D).
Appendix III Risk Disclosure Statement (filed as
Appendix III to Exhibit F to this Schedule
13D).
Appendix IV Stabilisation (filed as Appendix IV to
Exhibit F to this Schedule 13D).
The Registrant hereby agrees to furnish supplementally to the
Commission a copy of any of the above-listed Schedules or Appendices upon
request of the Commission.
<PAGE>
EXHIBIT H
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Finsbury Asset Management Limited
Neptune House, Triton Court, 14 Finsbury Square, London EC2A 1BR
Telephone: 071-256 8873 Telex: 8958024 Fax: 07l-638 0541
Jamie Borwick
Chairman
Scottish & Mercantile Investment Trust Plc
1 Love Lane
London
EC2V 7HJ
20th December 1991
Dear Jamie,
I set out below the amendments to the investment Management agreement dated 13th
June 1989, agreed at the board meeting held 19th December 1991.
(a) That the figure of 1/2 per cent shown in clause 1.1 of schedule 3 be amended
to 3/4 per cent.
(b) That clause 1.3 of schedule 3 be cancelled and the following new clause 1.3
inserted.
For the purposes of this clause "the portfolio" shall exclude a holding by you
or on your behalf in any investment trust company (as defined in section 842
ICTA 1988) of which for the time being we are the sole investment manager
together with a proportion, of the investment portfolio, of Ocean Wilsons
(Holdings) Plc on which an investment management fee is charged by us, equal to
that proportion of the issued ordinary share capital of Ocean Wilsons (Holdings)
Plc beneficially owned by you. For the avoidance of doubt "the portfolio" shall
include a holding by you or on your behalf in any of Rea Brothers Group Plc,
Ocean Wilsons (Holdings) Plc or Adam & Harvey Plc.
(c) Clause 5.1 of the agreement is amended so that our appointment may be
terminated by either of us giving to the other not less than twenty months
written notice at any time or such shorter notice as the other may agree to
accept.
In addition to the above and in connection with the dealing company,
Consolidated Investment Funds Limited, the amount of 20 per cent contained in
the second paragraph of section 3 of the agreement dated 3rd July 1989 shall be
reduced to 15 per cent.
The above amendments will have effect on and from lst January 1992.
If you agree the above amendments please sign and return to me the attached
copy.
Yours sincerely
E C Teiderman
A member of IMRO Registered in England No. 1865803
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<PAGE>
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Finsbury Asset Management Limited
Neptune House, Triton Court, 14 Finsbury Square, London EC2A 1BR
Telephone: 071-256 8873 Telex: 8958024 Fax: 07l-638 0541
29 November 1991
Mr J Borwick
Chairman
Scottish and Mercantile Investment Trust PLC
Manganese Bronze Holdings PLC 1 Love Lane
London EC2V 7HU
Dear Jamie,
At the Board Meeting held on 26th November, I was asked to prepare a paper in
support of a request by Finsbury Asset Management Limited that the fee for the
management of the investment portfolio should be increased from 0.5 percent to
0.75 percent.
In arriving at their decision the Board of "Finsbury" had before them statements
taken from S G Warburgs Investment Trust Manual for 1990/91 copies of which are
attached. This may be summarised as follows:-
Investments
Basis Gross Assets plus cash
----- ------------ ---------
Average values 1.21% 0.81%
Maximum 2.82% 1.05%
Minimum 0.50% 0.31%
It will be seen that the management fee presently charged by "Finsbury" is at
the lower end of the scale. On the basis of the fee charged by "Finsbury" at
30th September, the annual fees together with the charge for rent and rates
would be as follows:-
@ 0.5% @ 0.75%
Fees 109,120 163,680
Rent & Rates 23,492 23,492
------ ------
L132,612 L187,172
------- -------
Total assets at 30th September L26,883,000
-----------
Fees plus rent as percentage of
total assets 0.493% 0.696%
Other factors which influenced "Finsbury's" decision were firstly that
"Finsbury" have undertaken substantial amounts of additional work outside normal
management and which might properly be described as corporate advisory and
development for which they have made no charge and secondly, in order to improve
the service given to clients, consideration is being given to expanding the
investment department by engaging an additional investment analyst to seek out
special investment situations.
A member of IMRO Registered in England No. 1865803
- ----------------------------------------------------------
<PAGE>
If the board are agreeable to the above we would propose the following
alterations to the investment management agreement:-
(1) Clause 1.1 of Schedule 3 where a fee of 0.5 percent is mentioned this
should be amended to 0.75 percent.
(2) Clause 1.3 will be amended to reduce the present holding in investment
trusts managed by Finsbury from 5 percent to nil. The effect of this will
be to exclude from the portfolio any investments in investment trusts
managed by "Finsbury".
With respect to the investment dealing company "Finsbury" are proposing to
reduce their share of the profits from the present 20 percent to 15 percent.
As you are aware under the present arrangements the agreement may be terminated
on the giving of twelve months notice in January of each year. This means that
the period of notice can be as long as 24 months or as short as 12 months.
"Finsbury" consider this to be unsatisfactory and propose that the period of
notice should be amended to be 20 months from the date of notification of
termination.
The above alternations will have effect from lst January, 1992 if your board
agrees.
You will be aware that the fee charged by "Finsbury" for secretarial services is
L25,000 per annum. In view of increasing costs we feel that this should also be
considered at the end of March, 1992. We will be writing later in this
connection.
Yours sincerely,
E C Teideman
A member of IMRO Registered in England No. 1865803
- ----------------------------------------------------------
<PAGE>
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Finsbury Asset Management Limited
Neptune House, Triton Court, 14 Finsbury Square, London EC2A 1BR
Telephone: 071-256 8873 Telex: 8958024 Fax: 07l-638 0541
19 March 1991
Mr J Borwick
Chairman
Scottish and Mercantile Investment Trust PLC
Manganese Bronze Holdings PLC
1 Love Lane
London EC2V 7HU
Dear Jamie,
The agreement for secretarial services between your company and this company was
entered into on lst April, 1988 at an annual fee of L20,000 per annum.
There has been no increase in this fee since the commencement of the contract
despite inflation of 25 percent up to 31st December, 1990. In view of this we
propose, subject to your agreement, to increase the annual fee with effect from
lst January, 1991 to L25,000 per annum, in line with inflation.
In order that this situation should not recur in future years we would suggest
that the agreement be amended to enable the fee to be adjusted annually in line
with the rate of inflation.
We should be grateful for your agreement to the above.
Yours sincerely
E C Teideman
cc To all Directors of
Scottish and Mercantile Investment Trust PLC
A member of IMRO Registered in England No. 1865803
- ----------------------------------------------------------
<PAGE>
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Finsbury Asset Management Limited
Neptune House, Triton Court, 14 Finsbury Square, London EC2A 1BR
Telephone: 071-256 8873 Telex: 8958024 Fax: 07l-638 0541
3 January 1991
The Directors
Scottish and Mercantile Investment Trust PLC
Neptune House
Triton Court
14 Finsbury Square
London EC2A 1BR
Dear Sirs
At a meeting of the directors of Finsbury Asset Management, held on 17 December
1990, consideration was given to the level of annual fees to be charged in
respect of secretarial fees provided by this company under the agreement
effective from 1 April 1988.
In light of the subsequent level of inflation since the agreement the directors
have asked me to write to you requesting that the original fee of L20,000 p.a.
be indexed to take inflation into account and that the annual fee be increased
to L25,000 p.a. with effect from 1 January 1991.
Yours faithfully
Secretary
A member of IMRO Registered in England No. 1865803
- ----------------------------------------------------------
<PAGE>
- ---------------------------------------------------------------------
Finsbury Asset Management Limited
Neptune House, Triton Court, 14 Finsbury Square, London EC2A 1BR
Telephone: 071-256 8873 Telex: 8958024 Fax: 07l-638 0541
26th September, 1990
Scottish and Mercantile
Investment Trust PLC
Neptune House
Triton Court
14 Finsbury Square
London EC2A 1BR
Dear Sirs,
I write to inform you that following the liquidation of Fashion & General
Investment Trust PLC future rent and management costs will be recharged on the
basis of one sixth of the total per company as against the previous one seventh
per company. The change is effective from lst July, 1990.
In addition it should be noted that the management company is currently
disputing a proposed rental increase from L48,000 to L130,000 p.a. Although it
is hoped to achieve a reduction in the proposed amount is it clear that there
will be a substantial increase in the future.
Yours faithfully,
J W L Farrar
- ------------------------
SECRETARY
A member of IMRO Registered in England No. 1865803
- ----------------------------------------------------------
<PAGE>
- ---------------------------------------------------------------------
SCOTTISH AND MERCANTILE INVESTMENT TRUST PLC
Neptune House, Triton Court, 14 Finsbury Square, London EC2A 1BR
Telephone: 071-256 8873 Telex: 8958024 Fax: 07l-638 0541
18 September 1989
Finsbury Asset Management Ltd
Neptune House
Triton Court
14 Finsbury Square
LONDON EC2A 1BR
Dear Sirs
We refer to the Agreement dated 14 June 1989 between you and us whereby you
agreed to provide us with certain investment management services on the terms
and subject to the conditions set out therein ("the Agreement").
Pursuant to Clause 5.2 of the Agreement, we hereby request that the Agreement be
varied with immediate effect by the addition to sub-clause 8.1.2 thereof of the
following proviso:-
"Provided always that where there are attached to the aggregate of the
holdings of investments contained in the portfolio of your company and
any other company managed by us five percent (or such other percentage
as may from time to time be prescribed by regulations under Section 201
of the Companies Act 1985) or more of all the voting rights
attributable to the share capital of that company which are from time
to time exercisable at a general meeting we shall only act in
accordance with the written instructions of the Board before exercising
any voting or other rights attached to or involved in such holding or
any part thereof."
Save as varied above, the Agreement shall continue in full force and effect in
all respects.
<PAGE>
-2-
Please acknowledge receipt of this letter and confirm your acceptance of our
request by signing the attached and returning it to us marked for the attention
of the Company Secretary.
Yours faithfully
E C Teideman
SECRETARY
for and on behalf of
SCOTTISH AND MERCANTILE INVESTMENT TRUST PLC
We acknowledge receipt of the letter of which the above is a copy and confirm
our acceptance of your request set out in such letter.
Dated 19th September 1989
J W L Farrar
for and on behalf of
FINSBURY ASSET MANAGEMENT LIMITED
<PAGE>
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Finsbury Asset Management Limited
Neptune House, Triton Court, 14 Finsbury Square, London EC2A 1BR
Telephone: 071-256 8873 Telex: 8958024 Fax: 07l-638 0541
To: SCOTTISH AND MERCANTILE INVESTMENT TRUST PLC
of Neptune House, Triton Court, 14 Finsbury Square, London EC2A 1BR
Introduction
1. We are a member of the Investment Management Regulatory Organisation ("IMRO")
and as such regulated by IMRO in the conduct of investment business (as defined
in the Financial Services Act 1986 ("the Act")) and are bound by the rules
including any regulations made by the Board of IMRO as altered, amended, added
to or cancelled from time to time ("the IMRO Rules")
2. We, have been informed by you and believe that you carry on business as an
approved investment trust and are a business Investor as defined in the IMRO
rules and set out in Schedule 5 and wish us to provide you with certain
investment management services on that basis (including but not limited to
advising on and managing Investments within the meaning of the Act) and details
of which services are set out in paragraphs 7, 8 and 9 ( "the Services")
which we are pleased to agree to provide on the terms and subject to the
conditions of this Agreement and the Schedules which form part of this
Agreement.
The Services will be provided on the basis that you are a business
Investor and in consequence you will not obtain the benefit of certain of the
IMRO Rules.
Appointment
3. We are appointed as your sole Investment Managers with effect from the time
<PAGE>
of the receipt by us of the enclosed copy of this Agreement with the endorsed
confirmation of your acceptance signed by you. Our appointment shall continue in
full force and effect unless and until terminated in accordance with paragraph
5.1 below.
4. We reserve the right to perform our obligations through and/or delegate any
of our discretions to the agency of any subsidiary, associated company or any
third party of our choosing, provided that we have obtained the prior written
consent of the Board of Directors for the time being of your Company ("the
Board") so to do and that such transaction will ensure "best execution".
Termination and Variation
5.1 Our appointment may be terminated by either of us giving to the other in
January in any year not less than 12 months written notice or such shorter
notice as the other may agree to accept. Any termination of this Agreement shall
be without prejudice to the completion by us of any transactions already
initiated and any antecedent liability of either party.
5.2 This Agreement may only be varied by written agreement signed by both
parties.
Disclosure
6.1 We specifically draw your attention to the disclosure that certain of our
customers are "Controllers" and one of our customers is a Connected Customer
within the meaning of the IMRO Rules and to the other statements contained in
Schedule 4.
6.2 Your attention is also drawn to the warnings and statements set out in
Schedule 6 and appendices thereto.
6.3 The validity of this Agreement shall not be impeached on the grounds of
Schedule 4 or Schedule 6.
<PAGE>
The Services
7.1 We shall have full discretion to manage all investments and funds within
your portfolio from time to time ("the Portfolio") and shall advise the Board
as we consider appropriate in accordance with the Investment Objectives set-out
in Schedule 2 or as the Board may require but otherwise (save as provided in
paragraph 7.2 below) may act without restriction, and in particular as to the
types of investment, the markets in which investments are made, the amount of
any one investment and the proportion of the Portfolio which any one investment
or any particular kind of investment may contribute. Particulars of the
Portfolio as at the date of this Agreement and of the initial values thereof are
set out in Schedule 1.
7.2 The Services undertaken by us under this Agreement shall be subject to the
Investment Limitations set out in Schedule 2 and to the policies, direction
and control of the Board which will define your investment and other policies
from time to time.
7.3 We shall effect the investment and re-investment of the Portfolio including
by way of underwriting participation and the income arising therefrom in
accordance with your Memorandum and Articles of Association and the investment
policies of the Board and arrange for the transfer of investments into your name
or the name of your nominee.
7.4 Unless and until you notify us in writing not to do so without a further
Agreement, the Services will include advising on or effecting transactions
relating to Options, Futures, or Contracts for Differences or Margined
Transactions.
7.5 We will inform you in writing, in relation to any transaction we effect with
or for you:-
7.5.1 if commission mark up or mark down will be payable otherwise than by you
to us or at our direction or to or at the direction of any of our
Associates;
7.5.2 if we will also be remunerated by the other party to the transaction;
7.5.3 if the transaction relates to securities which have been the subject of
a primary or secondary offer thereof made within six months next before
the date on which the transaction is effected and we or any of our
Associates provided underwriting or other services in connection with
that offer.
7.6 All transactions to be effected for you with or through the agency of a
person who provides services under any Relevant Arrangements (as defined in Rule
6.01 of the IMRO Rules) will be effected so as to secure for your best execution
of the transaction disregarding any benefit which might enure directly or
indirectly to you from the service or benefits provided under that arrangement.
There are no Relevant Arrangements at the date of this Agreement.
Powers
8.1 Unless and until otherwise agreed between us in the performance of our
obligations under this Agreement we:-
8.1.1 may enter into make and perform all such contracts agreements and other
undertakings as may in our opinion be necessary or advisable or
incidental to the carrying out of the Investment Objectives;
8.1.2 may exercise on your behalf all voting and other rights attaching to or
involved in the holding of Investments as we in our absolute discretion
consider appropriate and unless otherwise directed by written
instructions from the Board;
8.1.3 shall be entitled to obtain and/or act or rely upon the opinion or
<PAGE>
advice of or any information received from any broker, lawyer, valuer,
surveyor or other expert whether reporting to you or to us;
8.1.4 shall not be precluded from contracting or entering into any financial
or other transaction with you and in the case of any transaction being
in respect of any Investment shall be entitled to deal at a net price
computed after taking into account our costs and expenses arising out of
or in connection with such transaction;
8.1.5 may buy Shares in any company whose Investments or assets we manage
without your prior consent;
8.1.6 commit you to an obligation to underwrite any issue or offer for sale of
securities without any restriction on the categories of securities or
financial limits on the extent of such underwriting; subject to the
limitations imposed in Schedule 2 to this Agreement.
8.1.7 may at our discretion and in all circumstances commit you (without
limit on the extent to which this may be done) to supplement the funds
in the Portfolio either by borrowing on your behalf or committing you to
a contract the performance of which may require you to supplement such
funds or to a transaction relating to Options, Futures or Contracts for
Differences whereby you may be required to pay a deposit or margin in
support of that transaction, or to supplement that payment after the
transaction has been effected.
8.2 we shall do all such things to enable you to comply with your obligations
under any regulatory rules regarding Investments.
8.3 We shall not be liable for the consequences of any investment decision made
within the Investment Objectives but we agree to indemnify you in respect of
<PAGE>
loss incurred as a result of gross negligence, wilful default or fraud by us or
any of our employees. We shall not be liable for the default of any custodians
or bankers.
8.4 We shall have the right for ourselves, our representatives and employees
to make unsolicited calls on you at any time at our discretion and may send you
any research and communicate to you any specific recommendations in any manner.
Administration
9.1 Unless otherwise agreed in writing we shall not hold any of your Investments
or money or any documents of title relating thereto, but will lodge the same
with bankers nominated by you in writing from time to time for safe custody or
for the credit of your relevant bank account as the case may be.
9.2 We shall have power to give instructions to such bankers to effect all
settlements and transactions and shall have a limited mandate in relation to the
operation of your relevant account.
9.3 We shall use reasonable endeavours to procure that such brokers as we may
from time to time appoint will forward to you copies of all contract notes
dividend tax vouchers and other advices issued or received by them showing
income received, the basis of fees and commissions charged and transactions
entered into.
9.4 We shall supply the Board quarterly with a valuation of the Portfolio and
more frequently if required by the Board the valuations other than the quarterly
valuations to be at your expense.
9.5 It shall not be our responsibility to collect income or reclaim Income Tax
from the Inland Revenue.
9.6 We may aggregate your transactions with those of our other clients
(including our Connected Customer) without prior agreement.
<PAGE>
Remuneration, Fees and Expenses
10. Our fees and charges are calculated on the basis and at the rates shown in
Schedule 3.
Indemnity Insurance
11. We do not maintain indemnity insurance.
Complaints Procedure
12.1 Any Complaints regarding any alleged breach or non-observance of any of our
obligations contained in this Agreement of which you may at any time become
aware should be made in writing to our Compliance Officer who will promptly
acknowledge your letter, notify our Chairman and investigate the circumstances
(which may involve your supplying any necessary information and your general
co-operation) and will report the results to you.
12.2 If a complaint remains unresolved between ourselves we will supply you with
a copy of the IMRO complaints procedure and you may approach IMRO and the
Securities and Investments Board direct.
Confidentiality
13.1 Both parties will at all times respect and protect the confidentiality of
information acquired as a result of this Agreement except as required by law by
way of disclosure to any competent regulatory body or authority.
13.2 It may be necessary in order to comply with paragraph 13.1 to supply such
information to a body outside the United Kingdom in which event we will notify
you and any expenses so incurred will forthwith be reimbursed by you.
<PAGE>
Interpretation
14. In this Agreement unless the context otherwise requires words and
expressions defined in the IMRO Rules shall have the same meaning herein.
Validity
15.1 In the event that any provision of this Agreement shall finally be
determined to be unlawful in accordance with English law such provision shall be
deemed severed therefrom but every other provision thereof shall remain in full
force and effect unless the business purpose of this Agreement is frustrated
thereby.
15.2 If any conflict shall arise between the provisions of this Agreement and
the IMRO Rules then such Rules shall prevail.
Kindly acknowledge receipt of this Agreement and confirm your acceptance of
these terms and conditions by signing the attached copy and returning it to us
marked for the attention of the Company Secretary.
Dated the 13th day of June 1989
Signature of
on behalf of FINSBURY ASSET MANAGEMENT LIMITED
<PAGE>
We acknowledge receipt of the Agreement of which this is a copy and confirm we
are a business Investor and our acceptance of the terms and conditions set-out
in such Agreement.
Dated the l4th day of June 1989.
Signature of
on behalf of SCOTTISH AND MERCANTILE
INVESTMENT TRUST PLC
<PAGE>
SCHEDULE 2
INVESTMENT OBJECTIVES
To maximize the return on assets either by way of capital appreciation or income
and to seek out "special situations" for investment with a view to medium to
long term capital appreciation.
INVESTMENT LIMITATIONS
Excluded Investments: Life Policies
Unit Trusts
PEPS
Collective Investment Schemes
Underwriting
The Company's financial exposure in underwriting any issue or offer for sale of
securities shall be limited to L1,000,000 in respect of any one issue or offer
for sale unless prior approval of the board be obtained.
<PAGE>
SCHEDULE 3
Remuneration, Fees, Expenses and Indemnity
1. Our fees and charges by way of remuneration for the Services pursuant to this
Agreement are levied and payable on the following basis:-
1.1 On the date of each valuation ("the relevant Valuation Date") a fee
shall be payable by you equal to that proportion of 1/2 per cent of the
total value of the Portfolio (for the avoidance of doubt, disregarding
any borrowings associated with any holdings in the Portfolio) as at that
relevant Valuation Date which the number of days from the immediately
preceding Valuation Date (or in the case of the first valuation after
the date of this Agreement from such date) to the relevant Valuation
Date bears to 365. We shall be entitled to debit such fee directly to
your account with your bankers from time to time.
1.2 A valuation of the Portfolio shall be made as at the date on which this
Agreement is terminated and you shall pay us a fee calculated as
provided in 1.1 above by reference to such valuation. Such valuation
shall include any investments the subject of uncompleted sales but shall
exclude the value of any investments represented by uncompleted
purchases.
1.3 For the purposes of this clause "the Portfolio" shall exclude a holding
by you or on your behalf in any investment trust company (as defined in
Section 842 ICTA 1988) of which we are for the time being sole
investment manager where such holding represents 5% or more in nominal
value of the equity share capital of such company. For the avoidance of
doubt "the Portfolio" shall include a holding by you or on your behalf
in any of Rea Brothers Group Plc, Ocean Wilsons (Holdings) Plc, or
Stocklake Holdings Plc.
<PAGE>
2. We shall be entitled to be reimbursed on demand all expenses (including the
fees of any advisers appointed pursuant to paragraph 8.1.3) properly incurred
in the performance of our obligations. Where we acting in our capacity as your
investment manager enter into commitments or incur expenses on your behalf any
consequent liabilities (other than such as may arise from the wilful default,
gross negligence or fraud on our part) shall either be met by you direct or we
shall be entitled to use any of your funds under our administrative control to
discharge such liabilities and to the extent that we shall make any payment on
your behalf or incur or suffer any liability, obligation, loss, damage, penalty,
judgment, cost or expense of any kind whatsoever acting in such capacity
aforesaid we shall (except as aforesaid) be fully indemnified in respect thereof
by you.
<PAGE>
The following is a summary of all omitted Schedules and Appendices to the
foregoing FSCT Management Agreement.
Schedule 1 Initial Portfolio Valuation.
Schedule 4 Disclosure Statement (filed as Schedule 4
to Exhibit F to this Schedule 13D).
Schedule 5 Definitions (filed as Schedule 5 to Exhibit
F to this Schedule 13D).
Schedule 6 Risk Disclosure Schedule (filed as Schedule
6 to Exhibit F to this Schedule 13D).
Appendix I General Risk Disclosure Statement (filed
as Appendix I to Exhibit F to this Schedule
13D).
Appendix II Additional Risk Disclosure Statement
(filed as Appendix II to Exhibit F to this
Schedule 13D).
Appendix III Risk Disclosure Statement (filed as
Appendix III to Exhibit F to this Schedule
13D).
Appendix IV Stabilisation (filed as Appendix IV to
Exhibit F to this Schedule 13D).
The Registrant hereby agrees to furnish supplementally to the
Commission a copy of any of the above-listed Schedules or Appendices upon
request of the Commission.
