Dated this 23rd day of May 1997
Settlement
between
BG SERVICES LIMITED
and
A.L.O.T. TRUSTEE LIMITED
establishing
AGENT LOYALTY OPPORTUNITY TRUST
THIS SETTLEMENT is made this 23 day of May One thousand nine hundred and ninety-
seven
BETWEEN
(1) BG SERVICES LIMITED of a limited liability Company incorporated in Guernsey
care of Minden House, 6 Minden Place, St. Helier, Jersey, Channel Islands
(hereinafter called "the Settlor"); and
(2) A.L.O.T TRUSTEE LIMITED a limited liability Company incorporated in Jersey
whose registered office is situated at Pirouet House, Union Street, St
Helier, Jersey, Channel Islands (hereinafter called the "Trustee").
WHEREAS
(1) The Settlor being desirous of making such Settlement as is hereinafter
contained has transferred or delivered to the Trustee or otherwise placed
under its control the property specified in Schedule One and described
therein as the Initial Settled Property.
(2) It is anticipated that further Property may in the future be transferred to
the Trustee to be held as an addition to the Trust Fund.
(3) The Settlement is hereby established in order to incentivize and encourage
loyalty of Sales Agents by facilitating the award of cash bonuses to Sales
Agents .
NOW THIS SETTLEMENT WITNESSETH as follows:-
1. DEFINITIONS
1.1 In this Settlement whenever the context permits the following expressions
shall have the following meanings:
"Award" An award of Units made to a Beneficiary pursuant to Clause 2
hereof.
"Award Agreement" An agreement entered into by the Trustee and a
Beneficiary pursuant to Clause 2 hereof.
"Beneficiary" a Sales Agent.
"the Company" That limited liability company known as London Pacific Group
Limited established in and under the laws of the Island of Jersey on 23rd
January 1985 under Company number 30810.
"the Life Company" London Pacific Life & Annuity Company, a North Carolina
life assurance company.
"Person" Any individual, organisation, institution or other body of
persons whether corporate or unincorporate.
"Proper Law" The law of the Island of Jersey.
"Property" Any real property if the same may under the lex loci situs be
subject to a trust, any personal property, any chose in action and any
rights or interest legal equitable or otherwise in or over any of the
foregoing.
"the Rules" The Plan Rules as set out in Schedule two hereof and any
amendments or modifications thereto.
"Sales Agent" An independent sales agents in the United States who is
party to an agency agreement with the Life Company for the sale of life
and annuity products.
"Share" An ordinary share of 5 US Cents each in the capital of the
Company.
"the Trustee" The Trustee or Trustees for the time being hereof.
"the Trust Fund"
(i) The property specified in Schedule One hereto;
(ii) all property paid or transferred by any person or persons to
or so as to be under the control of and (in either case)
accepted by the Trustee as additions to the Trust Fund; and
(iii) the property from time to time representing the said property
and any additions including any income accumulated pursuant to
the provisions hereof.
"the Trust Period" The period from the date hereof until whichever of the
following dates shall first occur namely:
(i) the day on which shall expire the period of one hundred years
from the date of this Settlement;
(ii) such earlier day (if any) prior to the day specified in
paragraph (i) of this sub-clause as the Trustee
may at its discretion appoint by deed.
"Unit" A Unit representing the right granted to a Beneficiary pursuant to
an Award requiring that the Trustee pay to him a bonus sum calculated in
accordance with the Rules by reference to the value of a Share on the
basis that one Unit shall be representative of the value of one Share.
1.2 The singular includes the plural and vice versa.
1.3 The masculine includes the feminine and vice versa and each includes the
neuter.
2. TRUSTS UPON WHICH THE TRUSTEE HOLDS THE TRUST FUND
2.1 The Trustee shall during the Trust Period stand possessed of the Trust
Fund upon the trusts hereof for the Beneficiaries subject to and upon the
terms and conditions hereinafter contained.
2.2 During the Trust Period the Trustee shall have full power and discretion
to:-
(i) make an award to a Beneficiary of a specified number of Units which may
entitle the Beneficiary to payment from the Trustee at a future date or
dates and in such Award Agreement the Trustee shall specify:-
(a) the full name and address of the Beneficiary;
(b) the number of Units (the "Award Units") in respect of which the
Beneficiary may be entitled to require payment from the Trustee;
(c) the date upon which the Trustee executes the Award Agreement (the
"Award Date"); and
(d) the date or dates (being after the Award Date) upon which the
Beneficiary shall become entitled to require payment in respect of
Award Units from the Trustee and the events which will trigger his
entitlement to such payments in respect of Award Units.
(ii) for the purpose of satisfying the right of any and each Sales Agent
receiving an Award as contemplated by the foregoing paragraph:-
(a) on or about the Award Date, purchase sufficient Shares to enable the
Trustee to hedge its liability to make all payments due to
Beneficiaries in respect of Awards; and
(b) borrow from BG Services Limited and/or any other person EXCEPTING
ALWAYS the Company such moneys as may from time to time be required
by the Trustee to pay for the Shares so purchased, on such terms as
may from time to time be agreed between the Trustee and any such
lender.
2.3 In the event that:-
(i) a Beneficiary assigns or charges or attempts to assign or charge his
interest hereunder;
(ii) a Beneficiary is adjudicated bankrupt or makes any arrangement or
composition with his creditors; or
(iii) a Beneficiary is subject to any agency or other agreement which shall be
terminated by reason of serious or persistent breach of the provisions of
such agency or other agreement or for any wilful default or negligence in
the discharge of the liabilities arising under such agreement or shall be
terminated for any other reason by the Life Company.
THEN and in any such event (as to the occurrence of which the Trustee's decision
shall be final) unless the Award otherwise expressly provides, all right and
interest to which such Beneficiary has not yet become absolutely entitled under
the terms of an Award shall be forfeited and the Beneficiary shall have no claim
whatsoever against the Trustee in respect of his Award Units.
2.4 At any time when there are no Beneficiaries but subject always to the
right of the Trustee to nominate Beneficiaries and at the expiration of
the Trust Period the Trustee shall stand possessed of any part of the
Trust Fund remaining after exercise by all the Beneficiaries of their
rights set out in the foregoing sections of this Clause 2, upon Trust for
such Sales Agents as the Trustee shall in its absolute discretion think
fit and if more than one in such proportions as the Trustee shall in its
absolute discretion determine and in default thereof for any subsidiary of
the Company.
3. POWER TO IGNORE INTERESTS
Notwithstanding any rule of law, equity or otherwise to the contrary the Trustee
in exercising any of the powers hereby conferred in favour of any particular
person is hereby expressly authorised to ignore entirely the interest of any
other person interested or who may become interested under these presents and in
particular (but without prejudice to the generality of the foregoing) no
appointment or advancement made in exercise of any power hereinbefore contained
shall be invalid on the grounds that:-
(a) an insubstantial illusory or nominal share is appointed to any one or more
objects of such power or left unappointed; or
(b) any object of such power is thereby altogether excluded;
but every such appointment or advancement shall be valid notwithstanding that
any one or more objects of the power is or are not thereby or in default of
appointment to take any share in the Trust Fund.
4. VOTING
The Trustee shall be entitled to exercise all and any voting rights attaching to
any of the Shares for so long as such Shares are held by the Trustee and shall
vote or cause voting rights to be exercised as it in its absolute discretion
think fit.
5. LIQUIDATION
In the event that the Company goes into liquidation otherwise than for the
purpose of a reorganisation or amalgamation and the Trustee receives a
distribution of the assets of the Company in respect of the Shares it shall
immediately transfer to each Beneficiary his due proportion of such assets
notwithstanding such Beneficiary would not have been entitled to his Award Units
or any part thereof in full and final settlement of all or any entitlement of
the Beneficiary in connection therewith.
6. APPOINTMENT AND RETIREMENT OF TRUSTEES
6.1 If any Trustee hereof whether original additional or substituted shall die
or being a company shall enter into liquidation or shall give notice of
desire to resign or shall become unfit to act in accordance with the
provisions of this clause 6 then the Trustees for the time being may by
instrument in writing appoint a new Trustee or Trustees.
6.2 Any Trustee may at any time resign the Trusteeship on giving not less than
14 days notice in writing addressed to his co-trustees (if any) and if
there are then no other Trustees such resignation shall not take effect
until the appointment of a new Trustee or new Trustees in place of the
retiring Trustee.
6.3 The office of a Trustee shall be automatically determined and vacated if
such Trustee being an individual shall become unfit to act or if such
Trustee being a company shall enter into liquidation whether voluntary or
compulsory (not being merely a voluntary liquidation for the purposes of
the amalgamation or reconstruction).
6.4 There shall be no obligation to have more than one trustee of this
Settlement and the maximum number of Trustees shall be three.
7. ADMINISTRATION
7.1 The Trustee shall make arrangements whereby all necessary accounts,
records, transfers and other documents in connection with the trusts of
this Settlement are prepared and kept and generally carry out any and all
administrative work in connection therewith.
7.2 Any Trustee for the time being hereof shall be entitled to charge and be
paid for its services as Trustees reasonable annual fees and reimbursement
of its property expenses of an amount to be agreed from time to time with
the Settlor.
7.3 Any Trustee being a person engaged in any profession or business shall be
entitled:-
(a) to charge and be paid all usual professional and other charges for
business transacted, time spent and services rendered by him or his
firm in connection with the execution of the trusts powers and
provisions, including acts which a Trustee not being in any profession
or business could have done personally; and
(b) to retain any brokerage or commission in respect of any stockbroking
or insurance transaction for which such a person is normally paid
brokerage or commission.
8. GENERAL POWER OF INVESTMENT
Subject always to any restrictions expressly contained in this Settlement the
Trustee shall have all the same powers of investment as a natural person acting
as the beneficial owner of the Trust Fund and its powers shall not be restricted
by any principle of construction (or rule or requirement of the Proper Law of
this Settlement save to the extent that such is obligatory) but shall operate
according to the widest generality of which the foregoing words are capable
notwithstanding that certain powers are herein more particularly set
forth.
9. ADDITIONAL POWERS OF INVESTMENT
Without limiting the power contained in clause 8 or any general power herein
contained the Trustee shall have power:-
9.1 to invest or lay out moneys comprised in the Trust Fund in the purchase of
or interest upon the security of such stocks funds shares securities or
other investments or property of whatsoever nature and wheresoever situate
and whether involving liability or not and whether producing income or not
or upon such personal or other credit with or without security as the
Trustee shall in its absolute discretion think fit to the intent that the
Trustee shall have the same full and unrestricted powers of investing and
transposing investments and laying out moneys in all respects as if it was
absolutely entitled thereto beneficially and without regard to the
requirements of the Proper Law (save to the extent that these are
obligatory);
9.2 to leave any assets the subject of any of the trusts of this Settlement in
their original state or in the state of investment in which they may be
from time to time;
9.3 at any time or times to sell or call in any investment or property for the
time being comprised in the Trust Fund or transpose or convert the same
into any other investments or property the acquisition of which with
moneys subject hereto is hereby authorised;
9.4 to apply any moneys forming part of the capital or income of the Trust
Fund in the purchase or subscription of partly paid shares and shall have
power to pay up such shares at such times and in such manner as it shall
in their absolute discretion determine;
9.5 pending the investment thereof for any period to place any moneys forming
part of the Trust Fund on current or deposit account with any bank or
banks or any other company conducting the business of banking or accepting
moneys on deposit in any part of the world and may open and maintain
banking accounts in the name of the Trustee or in the name of any one of
them if more than one or in the name of this Settlement and so that the
Trustee may if in its absolute discretion it thinks fit so place moneys
with any company which may for the time being be a direct or indirect
holding company or subsidiary of the Trustee or any one or more of the
Trustees if more than one or in any way associated with the Trustee or any
one or more of the Trustees if more than one;
9.6 (i) to consent to any re-organisation re-construction amalgamation or
other arrangement or scheme concerning any company the shares in which
comprise or form part of the Trust Fund;
(ii) to accept in addition to or in lieu of those already held other
shares in any company whose shares comprise or form part of the Trust Fund
in connection with or as part of any such re-organisation re-construction
amalgamation arrangement or scheme as aforesaid;
(iii) to consent to any reduction of capital or other dealing with such
shares as the Trustee may consider advantageous or desirable;
(iv) to surrender and deliver up any shares forming part of the Trust Fund
for such consideration and upon such terms and conditions as the Trustee
may approve to any company reducing its capital and the Trustee may
receive such consideration in the form of cash shares or other assets as
may be agreed between the Trustee and such company; and
(v) to agree to the winding-up of any company whose shares comprise or
form part of the Trust Fund and for the purposes of this sub-clause
"company" shall include any trust association or concern and "shares"
shall include stock securities bonds debentures debenture stock funds
mortgage or any other interest;
9.7 to acquire any investment of a speculative nature and any such investment
shall be deemed to be an authorised investment of the whole or any part of
the Trust Fund and the Trustee shall be under no duty to diversify
investments;
9.8 to borrow money or other property and/or to give guarantees for any
purpose connected with the trusts of this Settlement (including the making
of investments to be held as part of the Trust Fund) and if thought fit to
assign pledge or mortgage the whole or any part of the capital (including
future income) of the Trust Fund or any property which forms part of the
Trust Fund by way of security for such loan and/or guarantee and no
purchaser lender or other person paying or advancing money or other
property on a sale mortgage charge or other transaction purporting to be
made by the Trustee under or for any of the purposes of this Settlement
shall be concerned to see that the money or other property is wanted or
that no more than is wanted is raised or otherwise as to the propriety of
transaction or the application of the money or other property.
10. FURTHER PROVISIONS CONCERNING INVESTMENT
Notwithstanding any rule of law, equity or otherwise to the contrary nothing in
this Settlement shall oblige or impose upon the Trustee any duty to preserve or
enhance the value of the Trust Fund and accordingly, the Trustee shall not be
liable to anyone actually or prospectively interested hereunder for any failure
to preserve or enhance the value of the Trust Fund or any part of it.
11. MANAGEMENT OF THE TRUST FUND
The Trustee shall have the following powers in relation to the management of the
Trust Fund:-
11.1 To cause or permit any person to have and remain in possession or control
of the Trust Fund or any part thereof and notwithstanding the generality
of the foregoing the Trustee may permit any moneys bonds share
certificates or other securities for money or documents of or evidencing
title to property real or personal for the time being subject to the
trusts hereof to be and remain deposited with one or one only of the
Trustees if more than one or with any persons in any part of the world and
permit any investment securities or other real or personal property which
or any share or interest wherein shall be for the time being subject to
the trusts hereof to be and remain invested in the names of nominees or
trustees in any part of the world instead of in the names of the Trustee
with power to delegate to such persons such of the trust powers and
discretions hereby or by law vested in the Trustee with reference to the
premises so deposited or the property so invested in the names of such
nominees or trustees as the Trustee may consider expedient so to delegate
and so that no persons with whom such property is deposited or in whose
names such property is vested shall (unless a Trustee hereof) be concerned
with the trusts hereof or be responsible for any loss whatsoever resulting
either directly or indirectly from the exercise of the powers in this
clause hereinbefore contained unless such loss be caused by his own fraud
and the Trustee may pay out of the income or capital of the Trust Fund any
charges or other expenses incurred on or in connection with any such
account or deposit.
11.2 To accept any receipt of a treasurer or other officer of any body of
persons as being a good receipt for any payment hereunder notwithstanding
that such person may not be authorised to give receipts.
11.3 To keep the whole or any part of the trust property within or without the
jurisdiction of the Proper Law of this Settlement.
11.4 From time to time and at such intervals as it shall in its sole discretion
think fit to cause the accounts kept by it hereunder to be examined or
audited by such person or persons as it shall designate and to pay the
costs of such examination
or audit out of the capital or income of the Trust Fund.
12. ADMINISTRATION OF THE TRUST FUND
The Trustee shall have the following powers in relation to the administration of
the Trust Fund:-
12.1 To exercise any power or discretion hereunder without being bound to
ascertain all persons capable of benefiting thereby or otherwise
hereunder.
12.2 To delegate at any time (notwithstanding any rule of law equity or
otherwise to the contrary) by deed or deeds or instrument in writing
revocable during the Trust Period the execution or exercise of any or all
of the trusts powers or discretions hereby or by law conferred to any
person (including in cases where there is more than one Trustee to any one
of the Trustees) and if such person shall be acting in the course of his
trade, profession or vocation he shall be entitled to proper remuneration
out of the moneys in the Trust Fund and in particular and without
prejudice to the generality of the foregoing provisions to appoint one or
more attorneys under a power or powers of attorney to act jointly or
severally and with or without power for any such attorney to delegate in
specific transactions or class of transactions or generally and in a
particular place or in any place in relation to executing any document or
doing any act or receiving notice money or other property in respect of
the Trust Fund or any of the assets for the time being included therein or
to be acquired by the Trustee or in respect of any business carried on or
proposed to be carried on by the Trustee or in respect of the exercise of
any power conferred on the Trustee by this Settlement or by law whether or
not the Trustee has disclosed to any such attorney or any person dealing
with such attorney that in respect of the power to be so delegated they
are acting as Trustee.
12.3 To appropriate any part of the Trust Fund in the actual condition or state
of investment thereof at the time of appropriation in or towards
satisfaction of any
interest or share in the Trust Fund as may in all the circumstances appear
to the Trustee to be just and reasonable and upon and for the purpose of
any distribution or appropriation of the Trust Fund to place such value on
any assets from time to time forming part of the Trust Fund as the Trustee
in its discretion shall deem just and proper and any such valuation shall
be absolutely final and binding and conclusive on all persons interested
and further upon any such distribution to decide to whom specified assets
shall be given and to distribute assets subject to the payment of such
amounts (if any) as may be necessary to adjust any shares.
12.4 To decide what part of the expenses of the Settlement shall be charged to
capital and what part to income and to decide as between separate funds
and separate parts of shares the allocation of income gains profits and
losses. Any decision of the Trustee under this sub-clause whether made in
writing or implied from its acts shall so far as the law may permit be
conclusive and binding on the Beneficiaries and all persons actually or
prospectively interested under this Settlement.
12.5 To treat as income or as capital any dividends stock dividends rights
interests rents issues and profits derived from any property at any time
constituting the whole or any part of the Trust Fund and generally to
determine what part of the receipts of the Settlement is income and what
is capital whether or not such property is wasting hazardous or
unproductive or was purchased at a premium or discount and notwithstanding
the time when such dividends stock dividends rights interest rents issues
or profits were earned accrued declared or paid to make such reserves out
of income or capital as the Trustee deems proper for expenses taxes and
other liabilities of the Settlement to pay for income or for capital or to
apportion between income or capital any expenses of making or changing
investments and of selling exchanging or leasing including brokers'
commissions and charges and generally to determine what part of the
expenses of the Trust Fund shall be charged to capital and what part to
income and to determine as between separate funds and separate parts or
shares the allocation of income gains profits losses and distributions.
Any decision of the Trustee
under this sub-clause whether made in writing or implied from its acts
shall so far as the law may permit be conclusive and binding on the
Beneficiaries and all persons actually or prospectively interested under
this Settlement.
12.6 Instead of acting personally to employ and pay at the expense of the
income or capital of the Trust Fund any agent in any part of the world
whether advocates solicitors attorneys accountants brokers banks companies
or other agents and whether or not being the Trustee or one or more of
them if more than one without being responsible for the default of any
agent if employed in good faith to transact any business or to do any act
required to be transacted or done in the execution of the Trustee's powers
or discretions hereof including the receipt (whether on current or deposit
account) or payment of money or the execution of documents and to pay for
such services out of the capital or income of the Trust Fund as the
Trustee thinks fit and no Trustee hereof being an individual shall be
accountable for payment received by him or his firm for such services.
12.7 To take and act in accordance with the opinion of legal counsel concerning
any difference arising under this Settlement under or problems concerning
this settlement or any matter in any way relating to the Trust Fund or the
Trustee's duties in connection with this Settlement and to pay such legal
counsel's fees out of the capital or income of the Trust Fund as the
Trustee thinks fit and to the extent that the Trustee acts in accordance
with the opinion of such counsel the Trustee shall not be liable for any
loss to the Trust Fund which may arise by or from so acting.
12.8 To give receipts for any money securities or other property or effects and
so that any receipts so given shall be a sufficient discharge to the
person paying transferring or delivering the same and shall effectively
exonerate him from seeing to the application thereof or being answerable
for any loss or misapplication thereof.
12.9 To enter into any transaction or venture or exercise any power authorised
hereby
notwithstanding that one or more of the Trustees if more than one (or if a
company any of the officers of such company) is or are personally
interested in such transaction or venture or in the exercise of such power
and so that none of the Trustees or officers aforesaid shall be under any
liability to account for any remuneration profits or other benefits
received or derived by it or him thereby.
12.10 In the execution of any of the trusts hereof or in exercise of any of the
powers hereby or by law given to them to sell property or lend money to or
buy property or borrow money from or carry out any other transaction with
the trustees of any other trust or the executors or administrators of any
estate notwithstanding that a Trustee or if more than one any of them is
or are the same persons or person as those trustees executors or
administrators or any of them and where a Trustee or Trustees is or are
the same persons as those trustees executors or administrators the
transaction shall be binding on all persons then or thereafter interested
hereunder though effected and evidenced only by an entry in the accounts
of the Trustee.
13. OVERSEEING MANAGEMENT OF COMPANIES
13.1 The Trustee shall not be under any duty nor shall it be bound to interfere
in the business of any company entity or association incorporated or
unincorporated in any part of the world in which this Settlement is
interested and in particular:
(i) the Trustee shall not be under any duty to exercise any control the
Trustee may have over or to interfere in or become involved in the
administration management or conduct of the business or affairs of
any company in which this Settlement is or may be interested
although this Settlement holds the whole or a majority of the shares
carrying the control of the company and without prejudice to the
generality of the foregoing the Trustee shall not be under any duty
to exercise any voting powers or rights of representation or
intervention conferred on the Trustee by any of the shares in
respect of such company;
(ii) the Trustee shall leave the administration management and conduct of
the business and affairs of such company to the directors officers
and other persons authorised to take part in the administration
management or conduct thereof and the Trustee shall not be under any
duty to supervise such directors officers or other persons so long
as the Trustee does not have actual knowledge of any dishonesty
relating to such business and affairs on the part of any of them;
(iii) the Trustee shall assume at all times that the administration
management and conduct of the business and affairs of such company
are being carried on competently honestly diligently and in the best
interests of the Trustee in its capacity as shareholders or
howsoever they are interested therein and the Trustee shall assume
until such time as it has actual knowledge to the contrary that
persons appearing to be or who act as the directors officers and
other persons authorised to take part in the aforesaid
administration management and conduct are duly appointed and
authorised and so that the Trustee shall not be under any duty at
any time to take any steps at all to ascertain whether or not the
assumptions contained in this sub-clause are correct.
13.2 Without prejudice to the generality of the foregoing, the Trustee shall
not be under any duty:
(i) to exercise any rights or powers (whether available to them as
shareholders debenture holders or otherwise) enabling it to appoint
or elect or to remove a director officer or other person authorised
to take part in the administration management or conduct of the
business or affairs of such company and in particular shall not be
under any duty to take any steps to see that any trustee or any
officer or nominee of the Trustee becomes a director or other
officer of such company;
(ii) to exercise any power to require the payment of a dividend or other
distribution of profit and whether of an income or capital nature.
13.3 No Beneficiary shall be entitled in any way whatsoever to compel control
or forbid the exercise in any particular manner of any powers discretions
or privileges (including any voting rights) conferred on the Trustee by
reason of any shares or other rights of whatsoever nature in or over such
company.
13.4 The Trustee shall not be liable in any way whatsoever for any loss to such
company or the Trust Fund or the income thereof arising from any act or
omission of the directors officers or other persons taking part (whether
or not authorised) in the administration management and conduct of the
business or affairs of such company (whether or not any such act or
omission by any such foregoing persons shall be dishonest fraudulent
negligent or otherwise).
13.5 Without prejudice to the generality of the foregoing the Trustee shall not
be rendered responsible in any way whatsoever for any default or other act
or omission by the directors officers or other persons referred to in
paragraph (4) hereof by any express notice or intimation of such default
or other act or omission and the Trustee shall not be obliged or required
to make and enforce any claim in respect of such a default or other act or
omission and no person who is or may become entitled hereunder shall be
entitled to compel the making of such a claim but the Trustee may be
required to lend their names for the purpose of proceedings brought by a
Beneficiary in respect of any such default act or omission upon being
given a full and sufficient indemnity against all costs and expenses of
such proceedings.
14. EXERCISE OF TRUSTEE'S POWERS AND DISCRETIONS
14.1 The Trustee shall exercise the powers and discretions vested in it as it
shall think most expedient for the benefit of all or any of the persons
actually or prospectively interested under this Settlement and may
exercise (or refrain from exercising) any power or discretion for the
benefit of any one or more of them
without being obliged to consider the interests of others or other.
14.2 Subject to the previous sub-clause every discretion vested in the Trustee
shall be absolute and uncontrolled and every power vested in it shall be
exercisable at its absolute and uncontrolled discretion and the Trustee
shall have the same discretion in deciding whether or not to exercise any
such power.
15. POWER TO PAY TAXES AND DUTIES
In the event of any tax duty or fiscal imposition whatsoever becoming payable in
the Island of Jersey or elsewhere in respect of the Trust Fund or any part
thereof in any circumstances whatsoever the Trustee shall have power to pay all
such taxes duties or fiscal imposition out of the Trust Fund or the income
thereof notwithstanding that such liability as aforesaid may not be enforceable
through the Courts of the Island of Jersey or of such other jurisdiction as may
become the forum for the administration hereof by virtue of the exercise by the
Trustee of its powers in that behalf under this Settlement and shall have entire
discretion as to the time and manner in which the said taxes duties or fiscal
impositions shall be paid and the Trustee may pay such taxes duties or fiscal
impositions notwithstanding that the same shall not be recoverable from the
Trustee or the Beneficiaries or other persons entitled hereunder or that the
payment shall not be to the advantage of any Beneficiary or other person
entitled hereunder.
16. POWER TO INDEMNIFY
The Trustee shall have power to enter into any indemnity in favour of any former
trustee or any other person in respect of any tax duty or fiscal imposition or
other liability of any nature prospectively payable in respect of the Trust Fund
or otherwise in connection with this Settlement and (provided the amount
intended to be charged or deposited is reasonably commensurate with such
prospective imposition or liability) to charge or deposit the whole or any part
of the Trust Fund as security for such indemnity in such manner in all respects
as they shall think fit.
17. LIABILITY OF RETIRING TRUSTEE
If any Trustee ceases to be a trustee hereof such Trustee shall be released from
all claims demands actions proceedings and accounts of any kind on the part of
any person (whether in existence or not) actually or prospectively interested
under this Settlement for or in respect of the Trust Fund or the income of the
Trust Fund or the trusts of this Settlement or any act or thing done or omitted
in execution or purported execution of such trusts other than and except only
actions:-
(i) for breach of trust arising from any fraud, wilful misconduct or
gross negligence on the part of such Trustee; or
(ii) to recover from such Trustee trust property or the proceeds of trust
property in the possession of such Trustee or previously received by
such Trustee.
18. TRUSTEE INDEMNITY
In the purported execution of the trusts powers and provisions hereof no Trustee
shall be liable for any loss to the Trust Fund arising in consequence of the
failure depreciation or loss of any investments made or retained in good faith
or by reason of any mistake or omission made in good faith or of any other act
omission matter or thing whatsoever except for breach of trust arising from
fraud, wilful misconduct or gross negligence on the part of the Trustee who is
sought to be made liable.
19. POWER OF TRUSTEE TO ACT NOTWITHSTANDING PERSONAL INTEREST
The Trustee shall have power to exercise any power or discretion vested in the
Trustees notwithstanding that the Trustee or one or more of the Trustees if more
than one may be personally interested in the exercise thereof.
20. RIGHTS OF BENEFICIARIES DURING THE TRUST PERIOD
Subject to the Trustee's obligations by virtue of exercise of its discretions
subject to clause 2.2 hereof:-
20.1 the Trustee shall not be obliged to make known to any Beneficiaries that
this Settlement exists or any matters in relation thereto or that they are
named as such or that they are now or at any time hereafter included in
such expression and the Trustee shall not in any way be obliged to contact
them or any of them until any of them becomes absolutely and indefeasibly
entitled to any moneys or investments held by the Trustee hereunder and
the Trustee shall then only be obliged to inform the person then being
entitled of his or its actual entitlement and the existence of this
Settlement; and
20.2 the Trustee shall not be under any obligation to disclose to Beneficiaries
the rights and interests of any other Beneficiaries and no Beneficiaries
shall be entitled to information concerning the exercise of any power or
discretion by the Trustee.
21. TRUSTEE MAY REFUSE TO MAKE DISCLOSURE
Without prejudice to any right of the Trustees under the general law to refuse
disclosure of any document it is hereby declared that the Trustee shall not
(subject to the Order of any Court of competent jurisdiction) be bound to
disclose to any person any of the following documents that is to say:-
21.1 Any document setting forth or recording any deliberations of the Trustee
as to the manner in which it should exercise any power or discretion
conferred upon it by this Settlement or the reasons for any particular
exercise of any such power or discretion; or
21.2 Any other document relating to the exercise or proposed exercise of any
such
power or discretion (not being a deed or other writing which actually
exercises or merely records the exercise of any such power or discretion
and not being legal advice obtained by the Trustee at the cost of the
capital or income of the Trust Fund).
22. VARIATION OF THIS TRUST AND THE RULES
22.1 The Settlor may from time to time with the written consent of the Trustee
and by instrument or instruments in writing revoke alter or amend all or
any of the trust powers or provisions of the Settlement.
22.2 The Trustee may from time to time by instrument in writing revoke alter or
amend all or any of the provisions of the Rules.
22.3 Notwithstanding anything in sub-clauses 22.1 and 22.2 hereof nothing in
this clause shall authorise any revocation alteration or amendment to the
Trust powers or provisions of this Settlement or the Rules which would
either affect the beneficial entitlement of any person who has been
appointed a Beneficiary under the terms of this Settlement or would permit
the Trust to be utilised other than for the benefit of Sales Agents or a
subsidiary of the Company.
23. IRREVOCABILITY
This Settlement shall be irrevocable.
24. EXPENSES ON CREATION OF DECLARATION
The Trustee shall have power to pay out of the Trust Fund all expenses of
whatever nature incidental to the creation of this Settlement,
25. NAME
This Settlement shall be known as the Agent Loyalty Opportunity Trust or by such
other title as the Trustee shall from time to time appoint by deed.
26. GENERAL
26.1 The Trustees if more than one shall meet together as may be necessary for
the purpose of the trusts of this deed and all decisions relating thereto
taken by a majority of the Trustees present at any meeting of the Trustees
of which due notice has been given to all the Trustees shall be as
effective for all purposes as if such decisions were the decisions of all
the Trustees.
26.2 A written minute of a decision of all the Trustees if more than one
reached without any meeting shall if signed by all the Trustees be as
effective for all purposes as if such decision had been reached in a duly
convened meeting of all the Trustees.
26.3 The Trustees if more than one may appoint such committee or committees of
the Trustees consisting of not less than two of the Trustees for such
purpose or purposes and with such powers and authorities always within the
powers and authorities of the Trustees themselves and upon such terms and
conditions including in particular the removal of members of any such
committee or committees and the appointment of other members in their
place as the Trustees shall from time to time decide.
26.4 The Trustees if more than one and if any one or more Trustee is an
individual shall appoint a secretary who may be one of themselves.
26.5 The Trustee or any of them if more than one shall not be liable for any
loss or damage arising to the Trust Fund, the Shares or the assets of the
Trust otherwise than by reason of the gross negligence or wilful default
of themselves their
servants or agents and shall be entitled to an indemnity from the assets
of the Trust for all and any liability rising to the Trustee by reason of
its exercise or purported exercise of all or any of its powers or duties
hereunder or performance other than liability arising by reason of their
gross negligence or wilful default.
26.6 All nominations specifications directives and notices by the Company or
any Subsidiary shall be in writing signed by a Director or the Secretary
of the Company or Subsidiary (as the case may be).
26.7 (i) Notwithstanding the provisions of Clause 27 hereof the Trustee may at
any time or times during the Trust Period by deed declare that this Deed
shall from the date of such declaration take effect in accordance with the
law of some other place in any part of the world (not being a country
under the law of which this Deed would not be irrevocable) and as from the
date of such declaration the law of the country named therein shall be the
law applicable to the Deed but subject to the power conferred by this
sub-clause and until further declaration is made hereunder.
(ii) So often as any such declaration as aforesaid shall be made the
Trustee may at any time or times thereafter by deed make such
consequential alterations or additions in the trusts powers and provisions
of the Deed as the Trustee may consider necessary or desirable to ensure
that so far as may be possible the trusts power and provisions of this
Deed shall (mutatis mutandis) be as valid and effective as they are under
the Laws of Jersey.
27. PROPER LAW
This Settlement is established under the laws of the said Island of Jersey and
subject to the powers conferred on the Trustee herein and to each and every
exercise thereof the rights of all parties and the construction and effect of
the provisions hereof shall be subject to the exclusive jurisdiction of and
construed and regulated only according to the
laws of the said Island which subject to and as hereinafter provided shall be
the forum for the administration thereof notwithstanding that the Trustee or one
or more of them if more than one may from time to time be resident or domiciled
elsewhere than in the Island of Jersey.
28. SIGNIFICANCE OF HEADINGS
The headings in this document are inserted for convenience of reference only and
shall have no legal effect nor shall they affect in any way the construction of
any clause or Schedule contained herein.
IN WITNESS WHEREOF the parties hereto have executed this Settlement the day and
year first above written.
THE COMMON SEAL of
BG SERVICES LIMITED
was hereunto affixed
in the presence of:-
/s/ R W GREEN
Director
/s/ J H THWAITES
Authorised Signatory
THE COMMON SEAL of
A.L.O.T. TRUSTEE LIMITED
was hereunto affixed
in the presence of:-
/s/ R J PIROUET
Director
/s/ R W GREEN
Director
SCHEDULE ONE
Settled Sum
One hundred US Dollars
SCHEDULE TWO
AGENT LOYALTY OPPORTUNITY TRUST
RULES
These rules have been established pursuant to the Agent Loyalty Opportunity
Trust established by Settlement dated 23 May 1997.
1. Definitions
1.1. In this instrument wherever the context permits the following expressions
shall have the meanings set against them:-
"Account Value" shall mean the accumulated value as determined by the Life
Company of all in force fixed and variable deferred annuity and life
insurance policies issued by the Life Company and sold by an Award Holder.
"Award" shall mean an award of Units made to a Sales Agent pursuant to an
Award Agreement.
"Award Agreement" shall mean the written agreement described in Rule 5.2
evidencing the making of an Award to a Sales Agent and containing the
terms, conditions and restrictions pertaining to such Award.
"Award Date" shall mean the date of the Award Agreement.
"Award Holder" shall mean a Sales Agent to whom an Award has been made.
"Award Price" shall meam the price of a Unit specified in the Award
Agreement being a sum equivalent to the mid-market price of a Share on the
Award Date or such other price as the Trustee shall determine.
"Award Units" shall mean Units the subject of an Award.
"Bonus" shall mean a cash bonus calculated and payable as provided in Rule
8.
"Company" shall mean London Pacific Group Limited, a company incorporated
with limited liability in Jersey, Channel Islands.
"Exercise Notice" shall mean the written notice given by an Award Holder
to exercise an Award as referred to in Rule 7.1 and described in Rule 7.2.
"The Group" shall mean the Company and its subsidiaries.
"The Life Company" shall mean London Pacific Life & Annuity Company, a
North Carolina life assurance company.
"Rules" unless the context clearly indicates otherwise shall mean a rule
of the Trust as adopted by the Trustee and amended from time to time.
"Sales Agent" shall mean any independent sales agent in the United States
who is party to an Agency Agreement with the Life Company which remains in
full force and effect for the sale of the Life Company's life and annuity
products.
"Settlement" shall mean the Settlement dated 23 May 1997 known as the
Agent Loyalty Opportunity Trust.
"Share" shall mean an Ordinary Share of 5c each in the Company, as traded
on the London Stock Exchange.
"Specified Anniversary" shall mean the date set out in an Award Agreement
on which an Award Holder's Award shall be forfeited in accordance with
Rule 6.4.
"Specified Percentage" shall mean the percentage set out in an Award
Agreement required to determine whether an Award Holder's Award shall vest
in accordance with Rule 6.2.
"$" or "dollar" or "c" or "cent" refers to the legal tender of the United
States of America.
"Trust" shall mean the Agent Loyalty Opportunity Trust as it may be
amended from time to time.
"Trustee" shall mean the Trustee or Trustees for the time being of the
Trust.
"Unit" shall mean a unit representing the right granted to an Award Holder
pursuant to an Award requiring that the Trustee pays that Award Holder a
Bonus sum calculated in accordance with Rule 8 by reference to the value
of a Share on the basis that one Unit shall be representative of the value
of one Share;
"Vesting Conditions" shall mean the conditions set out in the provisions
of Rule 6; and
"Year" shall mean calendar year
1.2 The single includes the plural and vice versa.
1.3 The masculine includes the feminine and vice versa and each includes
neuter.
2. Administration
2.1 The Trustee shall have full power and discretion, subject to the express
provisions of these Rules:
2.1.1 To determine from time to time to which Sales Agents Awards shall be
made, the term of each Award, the Award Price, the time or times at
which all or portions of an Award may be exercised and the number of
Units the subject of an Award;
2.1.2 To construe and interpret these Rules and Awards granted thereunder,
and to amend and revoke the Rules. In the exercise of this power,
the Trustee 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 Award Agreement in a
manner and to the extent it shall deem necessary or expedient to
make these Rules fully effective;
2.1.3 To prescribe the terms and conditions of each Award, including
without limitation the bonus provisions;
2.1.4 Subject to applicable legal restrictions and the consent of the
Award Holder affected, to amend any outstanding Award Agreement,
including but without limitation the acceleration in whole or in
part.
2.1.5 Generally, to exercise such powers and to perform such acts as are
deemed necessary or expedient to promote the best interests of the
Company.
2.2 All decisions, interpretations and other actions of the Trustee shall be
final and binding on all Award Holders. The Trustee shall not be liable
for any action that it has taken or failed to take in good faith with
respect to these Rules
or any Award.
2.3 In the exercise of any power or discretion under these Rules the Trustee
shall first have regard to any written recommendations which it shall
receive from the Company or any committee of the Company.
3. Eligibility
Awards may be granted to any Sales Agents.
4. Awards subject to Rules
4.1 Restrictions
No Award granted under the terms of these Rules shall be capable of being
sold, transferred, pledged, encumbered or otherwise alienated or dealt
with by an Award Holder.
4.2 No Rights as a Shareholder
An Award Holder shall have no rights as a shareholder with respect to any
Units the subject of an Award or in respect of Shares held by the Trustee
at any time and without limitation of the generality of the foregoing. The
Award Holder shall not be entitled to dividends (ordinary or
extraordinary, whether in cash, securities or other property),
distributions, or other rights with respect to any Units or Shares and the
making of an Award shall not entitle the Award Holder to any rights in
respect of any Units or Shares.
5. Grant of Awards
5.1 General
The Trustee may make Awards at any time and from time to time during the
Trust Period of the Settlement. The Trustee shall specify the Award date
(the "Award Date") or, if it fails to do so, the Award Date shall be the
date of the action taken by the Trustee to make an Award.
5.2 Award Agreement
As soon as practicable after making an Award, the Award Holder and the
Trustee shall enter into a written Award Agreement substantially in the
form of the Appendix hereto which specifies the Award Date, the Award
Price, the number of Award Units, the Vesting Conditions, the Vesting
Schedule and the other terms and conditions of the Award.
5.3 Award Term
An Award which has not been exercised seven years after the Award Date
shall be forfeited on the seventh anniversary of the Award Date and shall
have no further effect.
6. Vesting Conditions
6.1 No Award Holder shall be entitled to exercise his rights under an Award
Agreement unless and until the Vesting Conditions applicable to an Award
have been satisfied. In order to determine whether the Vesting Conditions
have been satisfied in respect of any year the following calculations
shall be made:-
(i) As soon as practicable after 1 January of each year the Life Company
shall notify the Trustee in writing of:-
(a) the Account Value for each Award Holder which shall be
calculated as at 31 December (the "Calculation Date") of the
immediately preceding year (the "Ending Value")
(b) the Account Value for each Award Holder calculated as at 31
December of the year prior to the immediately preceding year
(the "Beginning Value").
6.2 Vesting Hurdle
An Award Holder's Award shall vest and his right under the Award become
exercisable from the next following Vesting Date otherwise on and subject
to the terms of the Award Agreement if his Ending Value exceeds the
Specified Percentage of his Beginning Value in respect of the same year.
6.3 Vesting Date
The Award Holders' Award for shall vest subject to fulfilment of the
provisions of this Rule 6 on 1 March in the year following the Calculation
Date, and such date shall be known as the Vesting Date.
6.4 Failure to Vest
In the event that an Award Holder does not meet the Vesting Conditions
contained in this Rule in respect of any year then that Award Holders'
Award shall not vest and become exercisable in that year. If that Award
Holder's Award does not meet the conditions of Rule 6.3 by the Specified
Anniversary of the Award Date then that Award Holder's Award shall be
forfeited and shall be of no further effect.
6.5 Notification of Vesting
The Trustee shall be under no obligation to notify an Award Holder whose
Award has vested in accordance with this Rule but an Award Holder may
enquire as to whether or not his Award has vested by application to Chief
Marketing Officer, London Pacific Life & Annuity Company, 1755 Creekside
Oaks Drive, Sacramento, California 95833.
7. Exercise of an Award following Vesting
7.1 Subject to the provisions of these Rules an Award Holder may exercise his
Award at any time in whole or in part by giving an Exercise Notice signed
by the Award Holder in accordance with the provisions of Rule 7.2.
7.2 The Exercise Notice shall be addressed to Chief Marketing Officer, London
Pacific Life & Annuity Company, 1755 Creekside Oaks Drive, Sacramento,
California 95833 and notice of exercise shall only be effective upon
receipt of the Exercise Notice. The Award Holder shall specify the number
of Award Units the subject of the exercise and details of how payment of
Bonus should be made including where relevant, payment details for wire
transfers to an Award Holder's bank account.
7.3 Notwithstanding any other provision of these Rules no Award shall be
capable of being exercised during any period or periods when the Company
or its Directors or either of them are unable to deal in Shares as a
result of the provisions of the Listing Rules of the London Stock
Exchange. Any such period or periods shall be known as a "Closed Period".
The Trustee, the Life Company and the Company shall be under no obligation
to inform Award Holders of the time or existence of a Closed Period, but
it shall be the responsibility of the Award Holder to establish whether or
not a Closed Period is operating before exercising any rights under an
Award.
8. Payment of Bonus following Exercise
8.1 In respect of an Award which has vested, the Trustee shall upon receipt of
a duly completed Exercise Notice by the Life Company calculate the Bonus
payable to the Award Holder by reference to the following formula:-
B = (EP-AP) x U
Where B = the Bonus payable;
EP = a sum equal to the average closing middle market price of a
Share on the London Stock Exchange for the five business days
following receipt of the Exercise translated into dollars by
reference to an appropriate dollar / pound sterling exchange
rate which shall be determined by the Life Company and
notified to the Trustee less 1% of such price representing
dealing costs involved in the Trustee selling Shares to
realise an amount equal to the Bonus;
AP = the Award Price; and
U = the total number of Units in respect of which the Award is
being exercised
The Bonus shall be paid by cheque or wire transfer to the Award Holder
within 30 days of the receipt by the Life Company of the Exercise Notice.
8.2 Any payment of any Bonus to an Award Holder shall be made net of any tax,
duty or other amounts which the Trustee, the Life Company or the Company
shall be obliged or entitled to deduct therefrom. The Trustee shall have
power
to withhold all or any part of an Award Holder's Bonus to meet any
obligations of the Award Holder due to the Trustee, the Life Company, the
Company or otherwise.
9. Termination of an Award Holder's Agency Agreement
9.1 If the Trustee receives written notification (the "Notice of Termination")
from the Life Company that, for any reason including death or permanent
and total disability, an Award Holder's Agency Agreement has terminated,
the Award Units held at the date of termination for that Award Holder but
not vested in accordance with Rule 6 shall be forfeited and the Award
Agreement shall have no further effect.
9.2 The Trustee shall be entitled to rely on the Notice of Termination and
shall not be obliged to make any further investigations or enquiries in
order to verify the authenticity of the Notice of Termination.
9.3 The Trustee shall not be liable for any action it may take or fails to
take following receipt of Notice of Termination from the Company or
otherwise.
10 Modification, Extension and Renewal of Awards
Within the limitations of these Rules, the Trustee may modify, extend or renew
outstanding Awards or may accept the cancellation thereof (to the extent not
previously exercised) for the making of new Awards in substitution therefore.
Notwithstanding the foregoing, no modification shall, without the consent of the
Award Holder, alter or impair his rights or obligations under an Award.
11. No Rights in respect of Agency Agreement
Neither these Rules nor any Award made hereunder shall confer upon any Award
Holder any right as against the Life Company other than the rights determined by
the
terms of the Agency Agreement nor shall the existence of an Award interfere in
any way with the Life Company's rights to terminate the Agency Agreement of any
Award Holder in accordance with its terms.
12. Duration and Amendments
12.1 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.
12.2 Amendment; Termination
The Trustee may amend, suspend or terminate these Rules at any time and
for any reason.
12.3 Effect of Amendment or Termination
No Award shall be made to an Award Holder under these Rules after the
termination hereof, except pursuant to an Award made before termination.
Termination or amendment of these Rules shall not affect any Award
previously made or any Award previously made under these Rules.
13. Proper Law
These Rules and all Award Agreements entered into pursuant to it shall be
governed by and construed in accordance with the laws of the Island of Jersey.
AGENT LOYALTY OPPORTUNITY TRUST
AWARD AGREEMENT
THIS AGREEMENT is made on the day set out in the First Schedule hereto.
BETWEEN
(1) A.L.O.T. Trustee Limited as Trustee (the "Trustees") of the Agent Loyalty
Opportunity Trust (the "Trust"); and
(2) The Sales Agent whose name appears below.
WHEREAS
The Trustee has resolved to award to the Sales Agent the number of Award Units
specified in the First Schedule to this agreement and the Sales Agent accepts
the said Award Units upon and subject to the terms of this agreement.
NOW IT IS HEREBY AGREED as follows:-
(1) Words and expressions used in this Award Agreement shall where context
permits bear the same meaning as in the Agent Loyalty Opportunity Trust
Rules (the "Rules") a copy of which are set out in the Second Schedule
hereto.
(2) In consideration of the Sales Agent continuing to be a Sales Agent the
Trustees hereby awards to the Sales Agent the Award Units specified in the
First Schedule hereto.
(3) Provided the Vesting Conditions as described in the Rules and where
relevant more particularly defined in the First Schedule hereto have been
satisfied in relation to this Award the Trustee agrees that at such time
as they shall receive an Exercise Notice from the Sales Agent they shall
pay to the Sales Agent a Bonus in such amount and on such terms and at
such time as shall be determined in accordance with the provisions of the
Rules.
(4) The Rules are hereby incorporated into this agreement and the Sales Agent
agrees to be bound thereby.
(5) This agreement shall be governed by and construed in accordance with the
laws of the Island of Jersey and the Sales Agent hereto irrevocably
submits to the non-exclusive jurisdiction of the said Island of Jersey.
IN WITNESS WHEREOF
The parties hereto have caused this agreement to be executed as of the date set
out below.
The common seal of
A.L.O.T. TRUSTEE LIMITED
was hereby affixed in the presence of:-
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DIRECTOR DIRECTOR/SECRETARY
. . . . . . . . . . . . . . . . . . . .
SALES AGENT SIGNATURE
. . . . . . . . . . . . . . . . . . . .
SALES AGENT NAME
. . . . . . . . . . . . . . . . . . .
WITNESS NAME
AGENT LOYALTY OPPORTUNITY TRUST
AWARD AGREEMENT FIRST SCHEDULE
Award Date ....................................................
Award Price US$.................................................
Number of Units Awarded ....................................................
Earliest Vesting Date ....................................................
Specified Anniversary ....................................................
Specified Percentage ....................................................