CUSIP NO. 00000000 13D
--------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
London Pacific Group Limited
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(Name of Issuer)
ORDINARY SHARES, par value $0.05
- --------------------------------------------------------------------------------
(Title of Class of Securities)
00-0000000
- --------------------------------------------------------------------------------
CUSIP Number
Ronald W. Green
Minden House, 6 Minden Place
St Helier, Jersey, JE2 4WQ
Channel Islands
011 44 1534 607700
- --------------------------------------------------------------------------------
(Name, address and telephone number
of person authorized to receive notices and communications)
May 3, 2000
(Date of Event which requires
filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
statement because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box: / /
(Continued on following pages)
<PAGE>
- --------------------------------------------------------------------------------
1) NAMES OF REPORTING PERSONS The London Pacific Group 1990
Employee Share Option Trust
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b)
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3) SEC USE ONLY
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4) SOURCE OF FUNDS
SC
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5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Jersey, Channel Islands
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NUMBER OF 7) SOLE VOTING POWER
2,137,935
SHARES ________________________________________________________
BENEFICIALLY
OWNED 8) SHARED VOTING POWER
11,960,446
BY ________________________________________________________
EACH
REPORTING 9) SOLE DISPOSITIVE POWER
2,137,935
PERSON ________________________________________________________
WITH
10)SHARED DISPOSITIVE POWER
11,960,446
- --------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,098,381 Ordinary Shares of 5 cents each
- --------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 21.9%
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14) TYPE OF REPORTING PERSON
EP, OO
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<PAGE>
INTRODUCTION
The London Pacific Group 1990 Employee Share Option Trust, a Jersey,
Channel Islands trust, hereby files this Statement on Schedule 13D (the
"Statement") on its own behalf.
Item 1. Security and Issuer.
-------------------
The class of equity securities to which this Statement relates is the
class of Ordinary Shares, $0.05 par value (the "Ordinary Shares"), of London
Pacific Group Limited, (the "Issuer"), a corporation incorporated under the laws
of Jersey, Channel Islands, the principal executive offices of which are located
at Minden House, 6 Minden Place, St. Helier, Jersey JE2 4WQ, Channel Islands.
Item 2. Identity and Background.
-----------------------
This Statement is filed by the London Pacific Group 1990 Employee Share
Option Trust, which is referred to herein as a "Reporting Person" or as the
"Trust." The Trust is organized under the laws of Jersey, Channel Islands, and
its principal office is located at Minden House, 6 Minden Place, St. Helier,
Jersey JE2 4WQ, Channel Islands. The Trust's principal business is to purchase
shares of the Issuer's outstanding Ordinary Shares on the open market, funded by
loans from the Issuer or the Issuer's subsidiaries up to an annual maximum of 5
percent of the consolidated net assets of the Issuer and its subsidiaries.
Options over the Ordinary Shares held by the Trust are then granted to the
employees of the Issuer and its subsidiaries and the Issuer's directors.
The Trustees of the Trust are:-
<TABLE>
<CAPTION>
Name Business Address Occupation Citizenship
- ---- ---------------- ---------- -----------
<S> <C> <C> <C>
Ronald W. Green Minden House Company Secretary British
6 Minden Place London Pacific Group Limited
St. Helier, Jersey
JE2 4WQ
Channel Islands
Clive A.C. Chaplin PO Box 404 Lawyer British
Whiteley Chambers Ogier & Le Mausurier
St. Helier, Jersey
Channel Islands
Victor A. Hebert 333 Bush Street Attorney U.S.
San Francisco Heller Ehrman White
CA 94104-2878 & McAuliffe
Richard J. Pirouet La Colline Accountant British
Le Mont Cambrai
St. Lawrence
Jersey, Channel Islands
</TABLE>
During the last five years, neither the Trust nor any Trustee of the
Trust has been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors), nor has the Trust or any Trustee thereof been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which the Trust or such Trustee 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.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
On May 3, 2000, the Issuer filed its first quarterly report on Form 10-Q
with the Securities and Exchange Commission (the "SEC"), because as of March 31,
2000, the Issuer no longer met the definition of the term Foreign Private Issuer
provided by Rule 3b-4(c) promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and thus became subject to quarterly reporting
requirements under Section 13 of the Exchange Act. As of May 3, 2000, the Trust
owned 14,098,381 shares of the Issuer's Ordinary Shares. The Trust has purchased
such Ordinary Shares on the open market, using an unsecured and interest free
loan from the Issuer, which is currently for approximately $51,327,000. The
Trust has waived its entitlement to dividends on any Ordinary Shares it holds.
Substantially all of such Ordinary Shares were subject to options granted on
various dates by the Trust to various employees and Directors of the Issuer and
its subsidiaries, based on recommendations by the Compensation Committee of the
Issuer's Board of Directors.
<PAGE>
Item 4. Purpose Of Transaction.
----------------------
The Trust has acquired and currently holds the Ordinary Shares for the
purpose of creating a pool of the Issuer's Ordinary Shares, over which it can
then grant options to various employees of the Issuer and the Issuer's
subsidiaries, based on recommendations by the Compensation Committee of the
Board of Directors of the Issuer. As of May 3, 2000, The Trust has issued
options to acquire 14,500,821 of Ordinary Shares, with expiration dates from
October 11, 2000 to March 13, 2007 and exercise prices from $2.16 to $25.75. Of
these, options to acquire 9,224,000 Ordinary Shares are held by directors and
officers of the Issuer. Depending on market and other conditions, the Trust may
continue to hold the Ordinary Shares, acquire additional Ordinary Shares of
Common Stock, or dispose of all or a portion of the Ordinary Shares it now owns
or may hereafter acquire. Except as set forth herein, The Trust has no plans or
proposals which relate to or would result in any of the transactions described
in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
-------------------------------------
(a) and (b) The aggregate number and percentage of Ordinary Shares of the
Issuer (based upon the representation of the Issuer in its quarterly report on
Form 10-Q for the quarter ended March 31, 2000 that it had 64,433,313 Ordinary
Shares outstanding as of that date) beneficially owned by the Trust, as well as
the number of Ordinary Shares as to which the Trust is deemed to have sole power
to vote or to direct the vote, shared power to vote or to direct the vote, sole
power to dispose or to direct the disposition, shared power to dispose or direct
the disposition, and the right to acquire is set forth in the table below, in
the Issuer's Form 20-F Annual Report and in various London Stock Exchange
announcements, which have been previously filed with the SEC on Form 6-K.
<TABLE>
<CAPTION>
========================== ==================== ================ =========================== =======================
Reporting Person No. of Shares Percentage Power to Vote Power to Dispose
Beneficially of Class Shared Sole Shared Sole
Owned
<S> <C> <C> <C> <C> <C> <C>
- -------------------------- -------------------- ---------------- ------------ -------------- ------------ ----------
The London Pacific Group 14,098,381 21.9% 11,960,446 2,137,935 11,960,446 2,137,935
1990 Employee Share
Option Trust
</TABLE>
The Trustees of the Trust have the absolute discretion to vote the Ordinary
Shares of the Issuer held by the Trust as they see fit. There are currently four
Trustees of the Trust, two are Directors or Officers of the Issuer and two are
independant Trustees. Decisions of the Trust, including exercising voting rights
in the Issuer's Ordinary Shares and the appointment of additional Trustees (the
maximum number allowed being five), must be made by a majority of the Trustees.
Their is no power to remove Trustees, other than should they be found to be of
unsound mind or bankrupt, or by exercise of the inherent power of the Jersey
Court.
The Trust shares the power to vote or dispose of the Issuer's Ordinary
Shares with employees who hold options on such shares that are exercisable
within 60 days, as specified by Rule 13d-3(d)(1)(i)(A) under the Exchange Act.
Mr. Arthur I. Trueger, the Executive Chairman of the Issuer, holds immediately
exercisable options on 7,000,000 of the Ordinary Shares held by the Trust. Mr.
Trueger's business address is 650 California, Suite 2800, San Francisco, CA
94108. Mr. Trueger's principal occupation is as the Executive Chairman of the
Issuer, London Pacific Group Limited, which is located at the address stated
above in Item 1. The Issuer is a financial services company which conducts
business in the areas of life insurance and annuities, venture capital
management, fund management and financial advisory services.
During the last five years the Mr. Trueger has not been convicted in a
criminal proceeding, nor has he been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction as a result of which he 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.
(c) During the past 60 days, 25 option holders exercised options over a
total of 521,550 shares at a weighted average exercise price of $3.43 per
share.The Trust also purchased 65,000 shares on the open market at an average
price of $12.75 during the past 60 days.
(d) To the Trust's best knowledge, no persons other than the Trust have the
right to receive or the power to direct proceeds from the sale of the Ordinary
Shares of the Issuer that the Trust holds. To the Trust's best knowledge, no
persons, including the Trust, have the right to receive or the power to direct
the receipt of dividends from such securities, because the Trust has waived its
right to such dividends.
(e) Not applicable.
<PAGE>
Item 6. Contracts, Arrangements, Understandings or Relationships with
-------------------------------------------------------------
Respect to Securities of the Issuer.
- -----------------------------------
(a) Employee Stock Option Trust.
----------------------------
As described above in Item 3, a subsidiary of the Issuer and its
subsidiaries have loaned approximately $51,327,000 to the Trust to finance the
Trust's purchases of the Issuer's Ordinary Shares, subject to a limit of 5
percent of the consolidated net assets of the Issuer and its subsidiaries during
any particular year. The loan is unsecured and is interest free. A copy of the
actual loan agreement is attached as Exhibit 7(1).
As described above in Items 3,4 and 5, the Trust has granted options to
purchase 14,500,821 of the Issuer's Ordinary Shares to various employees of the
Issuer and the Issuer's subsidiaries, including options to purchase 7,000,000
Ordinary Shares to Mr. Arthur Trueger, the Issuer's Executive Chairman, and
options to purchase 2,224,000 Ordinary Shares to the other officers and
directors of the Issuer. These grants were based upon the recommendations of the
Compensation Committee of the Issuer's board of directors. A form of option
agreement between the Issuer's employee and the Trust is attached as Exhibit
7(2).
The description of the options contained in this Statement on Schedule
13D is qualified in its entirety by the complete text of the option agreement, a
copy of which is attached hereto as Exhibit 7(2).
Item 7. Material to be Filed as Exhibits.
--------------------------------
Exhibit 7(1) Loan Agreement between the Issuer and the Trust
Exhibit 7(2) Option Agreement
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: May 12, 2000
/s/ Ronald W. Green
-------------
Ronald W. Green
Trustee
<PAGE>
List of Exhibits
Exhibit No. Description
- ----------- -----------
7(1) Loan Agreement between the Issuer and the Trust
7(2) Agreement with Respect to Options
THIS LOAN FACILITY AGREEMENT is made this 9th day of April, 1999
BETWEEN
(1) BG SERVICES LIMITED of Manor Place, St. Peter Port, Guernsey, Channel
Islands (the "Lender")
AND
(2) RICHARD JOHN PIROUET of Le Gallais Chambers, 54 Bath Street, St. Helier,
Jersey, and CLIVE AUBREY CHARLES CHAPLIN of Whiteley Chambers, Don Street,
St. Helier, Jersey, and RONALD WILLIAM GREEN of Minden House, 6 Minden
Place, St. Helier, Jersey, and VICTOR ALOYSIUS HEBERT of 333 Bush Street,
San Francisco, California 94104-2878, USA ( the "Trustees") as trustees of
The London Pacific Group 1990 Employee Share Option Trust (the
"Settlement").
AND IS SUPPLEMENTAL TO:
1. a loan agreement dated 20th April, 1990 between Berkeley Govett &
Company Limited ("BG&CL") (1) and John Gerald Patrick Wheeler and Ian
Walter Stanley Strang in their capacity as trustees of the Settlement
(2) the "First Loan Agreement" whereby BG&CL agreed inter alia to loan
a sum of US$753,053.05 as well as future sums to the trustees of the
Settlement;
2. an agreement dated 5th November, 1990 between BG&CL (1) and John
Gerald Patrick Wheeler and Ian Walter Stanley Strang in their capacity
as trustees of the Settlement (2) whereby the terms of the First Loan
Agreement were amended;
<PAGE>
3. an assignment agreement dated 20th March, 1991, between BG&CL (1) the
Lender (2) and John Gerald Patrick Wheeler and Ian Walter Stanley
Strang in their capacity as trustees of the Settlement (3) whereby all
of BG&CL's rights under the First Loan Agreement were assigned to the
Lender; and
4. a loan agreement dated 26th October, 1994 between the Lender (1) and
Richard John Pirouet, Ian Walter Stanley Strang and Clive Aubrey
Charles Chaplin in their capacity as trustees of the Settlement (2)
(the "Second Loan Agreement") whereby the terms of the First Loan
Agreement were superseded and the said trustees inter alia
acknowledged their indebtedness to the Lender for the amounts set out
in Schedule 1 of the Second Loan Agreement.
WHEREAS:-
A. The Trustees are the present trustees of The London Pacific Group 1990
Employee Share Option Trust established by a settlement dated 16th
February, 1990 between BG&CL (1) and John Gerald Patrick Wheeler and
Ian Walter Stanley Strang (2) originally known as "The Berkeley Govett
& Company Limited 1990 Employee Share Option Trust".
B. The Lender and the Trustees wish to combine the First Loan Agreement
and the Second Loan Agreement and restate them as one restated loan
agreement as set out herein.
<PAGE>
NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:-
1. Definitions
"Advances" means an amount drawn or to be drawn down by the Trustees or
otherwise made available by the Lender under the Facility;
"Business Day" means a day on which banks are generally open for business
in Jersey;
"Drawdown Notice" means the notice of a request for a drawdown referred to
in Clause 4.1 below from the Trustees to the Lender;
"Facility" means the loan facility provided for under this Agreement;
"Loan Agreements" means the First Loan Agreement and the Second Loan
Agreement both as may be amended;
"Outstanding Loan"means the amount specified in Schedule 1 hereto as owed
by the Trustees to the Lender under the provisions
of the Loan Agreements; and
"US$" or "dollar" means the legal tender from time to time of the United
States of America.
<PAGE>
2. The Outstanding Loan
The Trustees hereby acknowledge their indebtedness under the Loan
Agreements to the Lender in the sum specified in Schedule 1 hereto (the
"Outstanding Loan") subject to the terms and conditions of this Agreement.
3. The Facility
The Facility, which term shall include the Outstanding Loan, is a revolving
credit facility under which the Lender may make Advances to the Trustees,
and all Advances shall be made on and subject to the terms of this
Agreement.
4. Drawings
4.1 The Trustees may request the Lender to make an Advance under the
Facility of an amount specified in a Drawdown Notice (in the form set
out in Schedule 2 hereto) to the Lender which Drawdown Notice must be
given not less than one Business Day, or such shorter period as may be
agreed in writing between the parties, before the Advance is required,
and the Lender shall immediately upon receipt of a Drawdown Notice
indicate to the Trustees whether it intends to make an Advance under
the Facility to the Trustees of the amount specified in the said
Drawdown Notice.
4.2 A Drawdown Notice may request an Advance to be made on any Business
Day after the date of this Agreement provided that the Lender has not
made a Demand under Clause 7.1 hereof.
<PAGE>
4.3 An Advance shall be made by crediting immediately available funds to
the Trustees' account specified in the Drawdown Notice.
5. Purpose of the Facility
The Facility must be used by the Trustees solely for the purposes of
acquiring ordinary shares in London Pacific Group Limited as investments
for the benefit of and to implement the objectives of the Settlement.
6. Interest
The loan shall be interest free
7. Repayment of the Facility
7.1 Unless otherwise agreed in writing between the parties and in any and
all cases subject to Clause 7.3 hereof, the Facility or any part
thereof shall be repayable to the Lender (or at the direction of the
Lender to any other person) within thirty (30) days of receipt by the
Trustees of a written demand therefor from the Lender (the "Demand")
in such manner as the Lender shall think fit.
7.2 Without affecting the provisions of Clause 7.1, the Trustees may at
any time repay all or some of the Facility.
<PAGE>
7.3 Notwithstanding any other provisions of this Clause 7, the Trustees
shall only be liable to repay the Facility or any part thereof to the
extent of the assets of the Settlement and then only insofar as such
assets have not been allocated or appointed as hereinafter provided.
Accordingly, except in the event of fraud, or negligence of the
Trustees, a Demand shall not entitle the Lender or any other person to
have recourse to the assets of the Trustees other than those which, at
the time of the Demand, are held by the Trustees under the terms of of
the Settlement and which have not been allocated or appointed out of
the Settlement to any Beneficiary by the Trustees (the "Available
Assets"). Without prejudice to the generality of the foregoing, the
Available Assets do not include:
(i) any property appointed whether before or after the date of this
Agreement by the Trustees to or for the benefit of any Beneficiary or
transferred by the Trustees to or for the benefit of any Beneficiary
on the exercise of any option;
(ii) any property over which a subsisting option has been granted or any
property which in the opinion of the Trustees is required to cover the
grant of an option made to any Beneficiary before or after the date of
this Agreement;
(iii)the proceeds of sale of any property held by any Beneficiary to whom
such property has been appointed or transferred on the exercise of an
option;
<PAGE>
(iv) any other benefit received by or appointed by the Trustees whether
before or after the date of this Agreement to or for the benefit of
any Beneficiary; or
(v) any assets of the Trustees held either as trustee or co-trustee of any
other trust other than the Settlement or as nominee or as owner in its
own capacity in any way whatsoever.
8. Waiver of Dividends
The Trustees do hereby waive the right to receive dividends on the ordinary
shares of London Pacific Group Limited held by the Settlement.
9. Fees, Costs and Expenses
The parties do hereby agree that the fees, costs and expenses incurred by
the Trustees and due from time to time shall be discharged from the balance
standing to the credit of the capital and income account of the Settlement.
10. Security
The Trustees hereby agree that if so required by the Lender the Trustees
shall by way of security for the Facility assign, pledge, mortgage or
otherwise as reasonably required by the Lender provide security over
investments or other assets acquired by the Trustees with monies drawn
under the Facility (to the extent that the Trustees have not already
granted options thereover in accordance with the terms of the Settlement).
<PAGE>
11. Termination of Loan Agreements
For the avoidance of any doubt, the Loan Agreements and all other documents
executed in connection with the Loan Agreements are hereby terminated and
no longer remain in full force and effect.
12. Proper Law
This Agreement shall be governed by and construed in accordance with the
laws of the Island of Guernsey and each of the parties hereto irrevocably
submits to the non-exclusive jurisdiction of the courts of the Island of
Guernsey as regards any matter relating to this Agreement.
IN WITNESS WHEREOF this Agreement has been executed the day and year first above
written.
THE COMMON SEAL of BG )
SERVICES LIMITED was hereunto )
affixed in the presence of:- )
......................................................
Director
......................................................
Director/Secretary
<PAGE>
SIGNED by the said )
RICHARD JOHN PIROUET ) ......................................
in the presence of:
Witness' signature: ......................................
Witness' name: ......................................
Witness' address: ......................................
......................................
Witness' occupation: ......................................
SIGNED by the said )
CLIVE AUBREY CHARLES CHAPLIN ) ......................................
in the presence of:
Witness' signature: ......................................
Witness' name: ......................................
Witness' address: ......................................
......................................
Witness' occupation: ......................................
SIGNED by the said )
RONALD WILLIAM GREEN ) ......................................
in the presence of:
Witness' signature: ......................................
Witness' name: ......................................
Witness' address: ......................................
......................................
Witness' occupation: ......................................
<PAGE>
SIGNED by the said )
VICTOR ALOYSIUS HEBERT ) ......................................
in the presence of:
Witness' signature: ......................................
Witness' name: ......................................
Witness' address: ......................................
......................................
Witness' occupation: ......................................
<PAGE>
SCHEDULE 1
THE OUTSTANDING LOAN
The Trustees hereby acknowledges their
indebtedness to the Lender in the total sum of
US$49,515,653.18 as at the date of this Agreement.
<PAGE>
SCHEDULE 2
DRAWDOWN NOTICE
From: The Trustees of The London Pacific Group 1990 Employee
Share Option Trust
To: BG Services Limited
Attention: Mr R.W. Green
1. We refer to the revolving facility agreement (the "Facility
Agreement") dated 9th April, 1999 and made between the Trustees of The
London Pacific Group 1990 Employee Share Option Trust (the
"Settlement") and you. Terms defined in the Facility Agreement shall
have the same meaning in this Drawdown Notice.
2. We hereby give you notice that, pursuant to the Facility Agreement and
upon the terms and subject to the conditions contained therein, the
Trustees wish an Advance to be made to them under the Facility as
follows: (i) Amount: US$ (ii) Drawdown Date:
3. We confirm that the Advance is to be used for the purposes specified
in Clause 5.
4. The proceeds of this drawdown should be credited to:
Yours faithfully
........................................................
THE LONDON PACIFIC GROUP
1990 EMPLOYEE SHARE OPTION TRUST
SHARE OPTION AGREEMENT
The Trustees of The London Pacific Group 1990 Employee Share Option Trust
grant to ________________ an option to acquire __________ Ordinary Shares of 5c
each of London Pacific Group Limited at the price of US$____ per share. This
option is granted under, and is subject to all of the terms and conditions
applicable to Options contained in The London Pacific Group 1990 Employee Share
Option Trust Rules, a copy of which is attached to this Agreement and
incorporated into this Agreement by reference. Subject to the terms and
conditions of the Rules, this option is exercisable in accordance with the
Exercise Schedule attached to this Agreement. To the extent not exercised, this
option expires at the close of the business on _________________.
The Optionholder understands that the tax consequences associated with this
option and with Shares subject to this option can be complex and can depend, in
part, upon the Optionholder's particular circumstances. The Optionholder
understands that, for example, the exercise of this option can result in the
imposition of tax even before the Optionholder sells or otherwise disposes of
the said Shares and that the Optionholder's employer may withhold, as the case
may be, either (i) United States federal income tax and additional states income
tax from the Optionholder's wages or (ii) United Kingdom income tax from the
Optionholder's emoluments, as a result of the exercise of this Option.
Accordingly, the Optionholder should consult a professional tax adviser who can
advise on all relevant tax matters.
<PAGE>
Date of Grant: _____________
Executed by the Trustees of The London Pacific Group 1990 Employee Share Option
Trust.
.................................................... Trustee
.................................................... Trustee
The Optionholder hereby accepts and agrees to be bound by all of the terms and
conditions of this Agreement and the Rules.
Date: ___________________
Attachments: (1) The Exercise Schedule
(2) The Rules
(3) Notice of Option Exercise
Optionholder: _______________
Share Option over _______________
Granted: _______________
EXERCISE SCHEDULE
Subject to the terms and conditions set forth in the Rules and the Share
Option Agreement of which this schedule is a part, the Option is exercisable in
cumulative increments as follows:- "` Date Exercisable Portion of Option
- ----------------- -----------------------
<PAGE>
THE LONDON PACIFIC GROUP
1990 EMPLOYEE SHARE OPTION TRUST ('the Trust')
NOTICE OF OPTION EXERCISE
NOTE:
The tax consequences of exercising your option may vary according to the
time of exercise. YOU ARE THEREFORE ADVISED TO CONSULT YOUR PROFESSIONAL
ADVISERS BEFORE EXERCISING YOUR OPTION.
To: Trustees of The London Pacific Group 1990 Employee Share Option Trust
1. I/We hereby exercise the option referred to in the enclosed Option
Agreement in respect of ................... Ordinary Shares of 5 cents each in
London Pacific Group Limited at the price of US$ ........... per Share pursuant
to the Option Agreement and the Exercise Schedule.
2. Either
I am, and have at all times since the grant of the said option been, an
Employee (as defined in the Rules)
Or:
I am/We are entitled to exercise the said option because
...................................................................
...................................................................
...................................................................
3. I/We enclose a cheque payable to the Trustees of The London Pacific Group
1990 Employee Share Option Trust.
Full Name(s)
Address
Signature(s)
<PAGE>
THE LONDON PACIFIC GROUP
1990 EMPLOYEE SHARE OPTION TRUST
RULES
These Rules have been established pursuant to the London Pacific Group 1990
Employee Share Option Trust established by a Settlement dated 16th February,
1990.
1. Definitions
1.1 In these Rules wherever the context permits the following expressions
shall have the meanings set against them:-
(a)"Company"
shall mean London Pacific Group Limited, a company incorporated with limited
liability in Jersey, Channel Islands;
(b) "Employee"
means any employee, including an officer or
director, of a member of the Group;
(c) "Expiration Date means"
the last day of the term of an Option established
by Rule 5(c);
(d) 'the Group' means the Company and its Subsidiaries;
(e) "Option" means a
stock option granted pursuant to these Rules;
(f) "Option Agreement"
means the written agreement described in Rule 5(b) evidencing the grant of an
Option to an Employee or Consultant and containing the terms, conditions and
restrictions pertaining to such Option;
(g) "Option Shares" means the Shares subject to an Option;
(h) "Optionholder" means an Employee who holds an
Option;
(i) "Relevant Optionholder" means any Optionholder employed by North American
Trust Company of 225 Broadway, Suite 500, San Diego, California 92101 ("NATC")
as at the 10th November, 1998, designated as a Relevant Optionholder by the
Trustees in writing at the Trustees' sole and unfettered discretion;
(j) "Relevant Option Shares" means in relation to a Relevant Optionholder such
number of Option Shares as are notified to such Relevant Optionholder by the
Trustees in writing;
(k) "Relevant Vesting Date" means
the 31st March, 1999;
(l) "Rules" unless
the context clearly indicates otherwise, means a
rule of the Trust;
<PAGE>
(m) "Settlement"
means the Settlement dated 16th February, 1990
known as The London Pacific Group 1990 Employee
Share Option Trust;
(n) "Share" means
an Ordinary Share of 5c each in the Company;
(o) "Subsidiary"
means a Subsidiary of the Company, as determined by
the Trustees in accordance with the terms of the
Settlement;
(p) "$" or "dollar" or
"c" or "cent"
refers to the legal tender of the United States of
America;
(q) "Trust" means
The London Pacific Group 1990 Employee Share Option Trust as amended from time
to time; and
(r) "Trustees"
means the Trustee or Trustees for the time being of
the Trust.
1.2 The singular includes the plural and vice versa.
1.3 The masculine includes the feminine and vice versa and each includes neuter.
2. Administration
(a) The Trustees shall have full power and discretion, subject to the
express provisions of these Rules:
(i) To determine from time to time which Employees shall be granted
Options, the term of each Option, the time or times at which all or portions of
an Option may be exercised and the number of Shares subject to an Option;
(ii) To construe and interpret these Rules and Options granted under it,
and to amend and revoke the Rules and regulations for administration of this
Plan. In the exercise of this power, the Trustees shall generally determine all
questions of policy and interpretation that may arise, and may correct any
defect, omission or inconsistency in these Rules or in any Option Agreement in a
manner and to the extent it shall deem necessary or expedient to make these
Rules fully effective;
(iii) To prescribe the terms and conditions of each Option, including
without limitation the exercise price, and to specify the provisions of each
Option;
(iv) Subject to applicable legal restrictions and the consent of the
Optionholder affected, to amend any outstanding Option Agreement, including
without limitation the acceleration in whole or in part of the exercise schedule
of any Option outstanding;
(v) Generally, to exercise such powers and to perform such acts as are
deemed necessary or expedient to promote the best interests of the Company.
<PAGE>
(b) All decisions, interpretations and other actions of the Trustees shall
be final and binding on all Optionholders and all persons deriving their rights
from an Optionholder. The Trustees shall not be liable for any action that they
have taken or failed to take in good faith with respect to these Rules or any
Option.
3. Eligibility
Options may be granted to any Employees.
4. Shares Subject to Rules
(a) Restrictions.
When the Trustees grant an Option they shall retain, for themselves or
others, such rights to repurchase or cancel, rights of first refusal, and other
transfer restrictions applicable to Shares upon exercise of the Option, or shall
impose such other restrictions on the Shares, as the Trustees may determine. The
terms and conditions of any such rights or other restrictions shall be set forth
in the relevant Option Agreement.
(b) No Rights as a Shareholder.
An Optionholder shall have no rights as a shareholder with respect to any
of his Option Shares until the issue to him (as evidenced by the appropriate
entry in the register of members of the Company) of a share certificate
evidencing his holding of such Shares. Subject to Rule 7 hereof no adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property), distributions, or other rights with respect to
which the record date is prior to the date the said share certificate is issued.
5. Grant of Options
(a) General.
The Trustees may grant Options at any time and from time to time during the
Trust Period of the Settlement. The Trustees shall specify the date of grant or,
if the Trustees fail to do so, the date of grant shall be the date of the action
taken by the Trustees to grant the Option.
(b) Option Agreement.
As soon as practicable after the grant of an Option, the Optionholder and
the Company shall enter into a written Option Agreement substantially in the
form of the Appendix hereto which specifies the date of grant, the number of
Option Shares, the exercise price, the other terms and conditions of the Option
and any special restrictions on the Option Shares.
(c) Option Term.
No Option shall be exercisable more than ten years after the date it is granted.
<PAGE>
(d) Exercise Price.
The exercise price of Shares under each Option shall be determined by the
Trustees, having regard to the price at which the Shares have been purchased.
(e) Limits on Exercise.
Subject to the other provisions of these Rules, an Option shall be
exercisable in its entirety at grant or at such times and in such amounts as are
specified in the Option Agreement. Notwithstanding the terms of the Rules and
any
Option Agreement, as amended, in the event that the shares of the Company
are de-listed from the London Stock Exchange and the New York Stock Exchange,
all unvested Options shall vest immediately prior to such de-listing. For the
purposes of this Rule an Option is "unvested" if it is not exercisable and an
Option vests when it becomes exercisable for the first time.
(f) Exercise Procedures.
To the extent the right to acquire Shares has accrued, Options may be
exercised, in whole or in part, from time to time, by written notice from the
Optionholder to the Trustees stating the number of Shares being acquired and the
date of the Option Agreement representing the Option which is being exercised.
The written notice shall be accompanied by payment of the exercise price for the
Shares, and other applicable amounts, as provided in Rule 6.
(g) Termination of Employment; Death; Disability.
Subject as provided below, and in particular to Rule 5(j), if, for any
reason other than death or permanent and total disability, an Optionholder's
employment by the Company or a Subsidiary terminates, Options held at the date
of termination (to the extent then exercisable) may be exercised in the whole or
in part at any time within one month after the date of such termination, or such
greater or lesser period as is specified in the Option Agreement, as amended
(but in no event after the Expiration Date), but not thereafter. For the
purposes of this Clause 5(g) an Optionholder's employment by a Subsidiary shall
be deemed to terminate if the company employing the Optionholder ceases to be a
Subsidiary. If an Optionholder dies or becomes permanently and totally disabled
(as determined by the Trustees) while employed by the Group (or, in the event of
death, within the period that the Option remains exercisable after termination
of employment), Options
then held (to the extent then exercisable) may be exercised in whole or in
part by the Optionholder, by the Optionholder's personal representative, or by
the person to whom the Option is transferred by will or the laws of inheritance,
at any time within one year after the date of death or permanent and total
disability of the Optionholder or if less, the period specified in the Option
Agreement, but in no event after the Expiration Date. In the event of the
termination of employment, death or disability of the Optionholder before the
Option shall have become fully exercisable, the Option, to the extent not then
exercisable shall lapse and the Company or the Trustees shall be under no
liability whatsoever with regard thereto.
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(h) Leaves of Absence.
For purposes of Rule 5(g) above, an Optionholder's employment shall not be
deemed to terminate by reason of sick leave, military leave, or other leave of
absence approved by the Trustees.
(i) Modification, Extension and Renewal of Options.
Within the limitations of these Rules, the Trustees may modify, extend or
renew outstanding Options or may accept the cancellation thereof (to the extent
not previously exercised) for the granting of new Options in substitution
therefor. Notwithstanding the foregoing, no modification shall, without the
consent of the Optionholder, alter or impair his rights or obligations under an
Option.
(j) Overriding Provisions
The following provisions shall only have effect in the event of the closing
of the sale of NATC pursuant to the terms of an agreement dated 24th September,
1998, between NATC and City National Bank.
(i) Notwithstanding any provision in these Rules or in any Option Agreement
to the contrary, an Option held by a Relevant Optionholder shall be exercisable
in whole or in part, at the discretion of the Relevant Optionholder, over
Relevant Option Shares from the Relevant Vesting Date PROVIDED THAT the Relevant
Optionholder continues to be an employee of either (1) NATC; or (2) City
National Bank as at the Relevant Vesting Date.
(ii) Notwithstanding any provision in these Rules or in any Option
Agreement to the contrary, in the event of a Relevant Optionholder either being
made redundant or being asked to leave the employment of NATC or City National
Bank without due cause, in either case before the Relevant Vesting Date, an
Option held by such Relevant Optionholder shall be exercisable in whole or in
part at the discretion of the Relevant Optionholder over Relevant Option Shares
from the date of such termination of employment. For the purposes of
clarification of this Rule, in the event of the Relevant Optionholder: (1)
leaving his employment of his own volition, or (2) having his employment
terminated for Cause, before the Relevant Vesting Date, any Option held by such
Relevant Optionholder shall lapse and the Company or the Trustees shall be under
no liability whatsoever with regard thereto.
As used herein, "Cause" includes, as exclusively determined by the Trustees, the
Relevant Optionholder's: (1) wilful misconduct against the Group or any of its
directors, officers, employees or agents; (2) breach of confidentiality against
any Group company; (3) gross negligence in the course of or in connection with
the Relevant Optionholder's services for the Group; (4) illegal or unethical
business practices; or (5) a conviction by a competent court of law for a
criminal offence.
(iii) In the event of an Option becoming exercisable under the provisions
of Rule 5(j)(i), such Option shall, if at all, be exercised before 31st March,
2001, and whether or not the Relevant Optionholder is at the time of exercise of
such Option an employee of NATC or City National Bank. In the event that such
Option is not exercised before 31st March, 2001, the said Option shall lapse and
the Company or the Trustees shall be under no liability whatsoever with regard
thereto.
<PAGE>
6. Payment upon Exercise of Options
(a) Exercise Price.
The exercise price of Shares acquired under this Plan shall be paid either
in full at the time an Option is exercised or pursuant to any deferred payment
arrangement that the Trustees in their discretion may approve; provided,
however, that unless otherwise approved by the Trustees, any deferred payments
shall bear interest at such rate as the Trustees may determine in their absolute
discretion.
(b) Form of Consideration.
If, and to the extent, permitted or authorised by the Trustees, in their
absolute discretion, an Optionholder may make all or any portion of any payment
due to the Company upon exercise of an Option by delivery of any property
(excluding shares of the Company) other than cash, so long as such property
constitutes good and valuable consideration for the Shares under applicable law
and is surrendered in good form for transfer.
7. Adjustment of Shares
If the number of Shares in issue is hereafter increased or decreased, or
Shares are changed into or exchanged for a different number and/or kind of
shares or other securities of the Company or of another corporation, by reason
of a reorganisation, merger, consolidation or other acquisition, capitalisation,
reclassification, consolidation, division or subdivision or declaration of stock
dividends, or a special dividend is declared, the total number and/or kind of
Shares for the acquisition of which Options may be granted under these Rules,
and the number and/or kind of Shares as to which Options (or portions thereof)
are outstanding, may be adjusted pro rata by the Trustees. Any adjustment in an
outstanding Option shall be made without change in the aggregate exercise price
applicable to the unexercised portion of such Option but with a corresponding
adjustment in the exercise price per Share. Any adjustment under this Rule 7
shall be subject to the provisions of the Company's Memorandum and Articles of
Association, as amended, and applicable law.
8. No Right to Employment
Neither these Rules nor any Option granted hereunder shall confer upon any
Optionholder any right with respect to continuation of employment by, or the
provision of consulting services to, the Company or any of its Subsidiaries, or
shall interfere in any way with the Company's or any of its Subsidiaries' right
to terminate the employment or services of any Optionholder at any time with or
without cause.
<PAGE>
9. Legal Requirements
The Company shall not be obliged to issue any Shares upon exercise of any
Option unless the Shares are at that time listed on a Stock Exchange or
effectively registered or exempt from registration under any relevant securities
laws of the United States or the United Kingdom and the issue of the Shares is
otherwise in compliance with all such applicable securities laws and the
regulations of any Stock Exchange on which the Company's securities may then be
listed. The Company shall have no obligation to register the Shares under any
securities laws of the United States or the United Kingdom or to take any other
steps which may be necessary to enable the Shares to be issued under any
securities laws. Upon exercising all or any portion of any Option, an
Optionholder may be required to furnish representations or undertakings deemed
appropriate by the Company to enable the issue of the Shares or subsequent
transfers of any interest in the Shares to comply with applicable securities
laws. Certificates evidencing the holding of Shares issued upon exercise of
Options may bear any legend required by, or useful for purposes of compliance
with, applicable securities or other laws, these Rules or the Option Agreements.
10. Duration and Amendments
(a) Duration.
These Rules shall become effective on the date of execution of the
Settlement and terminate automatically on expiration of the Trust Period under
the Settlement. These Rules, any amendments to these Rules and any Options
granted hereunder whose validity depends upon amendments subject to approval of
holders of Shares shall be null and void if such approval is not obtained.
(b) Amendment; Termination.
The Trustees may amend, suspend or terminate these Rules at any time and
for any reason; provided, however, that any amendment which increases the number
of Shares available for issue by the Company under these Rules (except as
provided in Rule 7) shall be subject to the approval of the holders of Shares.
Such shareholders' approval shall not be required for any other amendments of
these Rules.
(c) Effect of Amendment or Termination.
No Shares shall be issued under these Rules after the termination hereof,
except pursuant to an Option granted before termination. Termination or
amendment of these Rules shall not affect any Shares previously acquired or any
Option previously granted under these Rules.
11. Proper Law
These Rules and all Option Agreements entered into pursuant to them shall
be governed by and construed in accordance with the laws of the Island of
Jersey.
These Rules have been amended by an Amendment No. 1 effective from 29th
December, 1995, an Amendment No. 2 effective from 29th January, 1996 and an
Amendment No. 3 effective from 30th November, 1998.
