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Licence renewel after points

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HI,

I have just received my first 3 points after 35+years on the road. The confusion for me is that I have an old paper licence and it says on the fixed penalty notice to send it in with payment for it to be destroyed. I can't renew to photo licence online as I have no passport. The form D1 (licence application/change) I have from the post office has 2 options of which I'm not sure which one to answer ie option1 asks my to tick box (to replace my licence as it has been lost, stolen, defaced, destroyed) option2 is to exchange my paper licence for a photocard licence (but then ask for the old paper licence to be sent in for this option which will have been sent off and detroyed, which option is the right one?

Thanks

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