Byte Metaverse Holdings Limited - Proxy Solicitation & Information Statement 2023

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a stockbroker or other registered dealer in securities, a bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Michong Metaverse (China) Holdings Group Limited, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee .

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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MICHONG METAVERSE (CHINA) HOLDINGS GROUP LIMITED 米虫元宇宙（中國）控股集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 8645)

(1) PROPOSED ADOPTION OF SHARE AWARD SCHEME; (2) TERMINATION OF EXISTING SHARE OPTION SCHEME AND PROPOSED ADOPTION OF THE NEW SHARE OPTION SCHEME; AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

A notice convening the EGM of Michong Metaverse (China) Holdings Group Limited to be held at Room A3, 7/F, Noble Financial Center, No.1006, Fuzhongsan Road, Futian District, Shenzhen, the PRC on Friday, 14 April 2023 at 10:30 a.m. is set out on pages EGM-1 to EGM-3 of this circular.

Whether or not you are able to attend the EGM, please complete and sign the enclosed form of proxy for use at the EGM in accordance with the instructions printed thereon and return it to the Company’s branch share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the EGM (i.e. not later than 10:30 a.m. on Wednesday, 12 April 2023 (Hong Kong time)) or the adjourned meeting (as the case may be). Completion and return of the form of proxy will not preclude shareholders from attending and voting in person at the EGM if they so wish.

This circular together with the form of proxy will remain on the “Latest Listed Company Information” page of the Stock Exchange’s website at www.hkexnews.hk for at least seven days from the date of its publication. This circular will also be published on the Company’s website at www.metamichong.com.

16 March 2023

CHARACTERISTICS OF GEM

The GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration.

Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

	Page
CHARACTERISTICS OF GEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	i
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
APPENDIX I – PRINCIPAL TERMS OF THE SHARE AWARD SCHEME . . . . . . . .	I-1
APPENDIX II – PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME . . .	II-1
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1

ii -

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions shall have the following meanings when used herein:

“Adoption Date”

being the date on which the Share Award Scheme and/or the New Share Option Scheme (as the case may be) becomes unconditional

“Affiliate” a company that directly, indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Company and includes any company which is (a) the holding company of the Company; (b) a subsidiary of holding company of the Company; (c) a Subsidiary; (d) a subsidiary of a Subsidiary; (e) the controlling shareholder of the Company; (f) a company controlled by the controlling shareholder of the Company; (g) a company controlled by the Company; (h) an associated company of the holding company of the Company; (i) an associated company of the Company; or (j) associated company of controlling shareholder of the Company
“Amended Rules” the amendments to the Listing Rules relating to share schemes of listed issuer, which has taken effect on 1 January 2023 pursuant to the Consultation Conclusions
“associate(s)” has the meaning ascribed to it under the GEM Listing Rules
“Articles of Association” the articles of association of the Company as amended from time to time
“Award(s)” an award/awards granted by the Board, the committee of the Board or person to which the Board has delegated its authority to a Selected Participant, which may vest in the form of Awarded Shares or the actual selling price of the Awarded Shares in cash, as the Board, the committee of the Board or person to which the Board has delegated its authority (as the case may be) may determine in accordance with the terms of the Share Award Scheme Rules
“Award Letter” a letter to be issued by the Company to each Selected Participant specifying the Grant Date, the number of Awarded Shares underlying the Award, the vesting criteria and conditions, and the Vesting Date and such other details as may consider necessary
“Award Period” the period of 10 years commencing on the Adoption Date, and ending on the Business Day immediately prior to the tenth anniversary of the Adoption Date
“Awarded Share(s)”
the Share(s) granted to a Selected Award Participant in an Award
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DEFINITIONS

“Board” the board of the Directors “Business Day” any day on which the Stock Exchange is open for the trading of securities “close associate” has the meaning ascribed to it under the GEM Listing Rules “Company” Michong Metaverse (China) Holdings Group Limited, a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on GEM (stock code: 8645) “connected person(s)” has the meaning ascribed to it under the GEM Listing Rules “Consultation Conclusions” Consultation Conclusions on Proposed Amendments to Listing Rules relating to Share Schemes of Listed Issuers and Housekeeping Rule Amendment published by the Stock Exchange in July 2022 “core connected person(s)” has the meaning ascribed to it under the GEM Listing Rules “Director(s)” the director(s) of the Company from time to time “E-Commerce” electronic commerce “EGM” the extraordinary general meeting of the Company to be held and convened at Room A3, 7/F, Noble Financial Center, No. 1006, Fuzhongsan Road, Futian District, Shenzhen, the PRC on Friday, 14 April 2023 at 10:30 a.m. (or any adjournment thereof) for the purpose of considering and, if thought fit, approving, among other things, (1) the adoption of the Share Award Scheme and (2) the termination of the Existing Share Option Scheme and the adoption of the New Share Option Scheme “Eligible Award Participant(s)” including (a) the Employee Participant(s); and (b) the Service Provider(s), provided that the Board may have absolute discretion to determine whether or not one falls within the above categories “Eligible Option Participant(s)” including (a) the Employee Participant(s); and (b) the Service Provider(s), provided that the Board may have absolute discretion to determine whether or not one falls within the above categories

DEFINITIONS

“Employee(s)”

any employee (whether full-time or part-time) of any members of the Group or any Affiliate, provided that the Grantee shall not be taken as ceasing to be an Employee in the case of (a) any leave of absence duly approved by the members of the Group or the relevant Affiliate; or (b) internal transfer or secondment amongst any members of the Group and any Affiliates, and any successor thereof, and provided further that an Employee shall, for the avoidance of doubt, cease to be an Employee with effect from (and including) the date of termination of his employment
“Employee Participant(s)” the director(s) and employee(s) (whether full-time or part-time) of any member of the Group (including persons who are granted Awards/Options under the Share Award Scheme / the New Share Option Scheme as inducement to enter into employment contracts with the Group)
“Existing Share Option Scheme” the existing share option scheme adopted by the Company on 11 November 2019
“GEM” GEM of the Stock Exchange
“GEM Listing Committee” the GEM listing committee of the board of directors of the Stock Exchange elected or appointed in accordance with the Articles of Association of the Stock Exchange and, where the context so permits, any committee or sub-committee thereof
“Grant Date” the date on which the grant of an Award is made to a Selected Award Participant, being the date of the relevant Award Letter
“Grantee” any Eligible Award Participant and/or Eligible Option Participant who accepts the Award or Offer (as the case may be) in accordance with the terms of the Share Award Scheme or the New Share Option Scheme (as the case may be) or (where the context so permits and as referred to in the Share Award Scheme) his Personal Representative(s)
“Group” the Company together with its subsidiaries, and “members of Group” shall mean the Company and/or any of its subsidiary(ies)
“Hong Kong” Hong Kong Special Administrative Region of the PRC “Independent Third Party(ies)” party(ies) who is/are independent of the Company and its connected person(s)
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DEFINITIONS

“inside information”	has the meaning defined in the Securities and Futures Ordinance
	(Chapter 571 of the Laws of Hong Kong) as amended from time to
	time
“Latest Practicable Date”	10 March 2023, being the latest practicable date for ascertaining
	certain information contained in this circular
“Listing Rules” or “GEM Listing	the Rules Governing the Listing of Securities on GEM of the Stock
Rules”	Exchange
“New Share Option Scheme”	the new share option scheme proposed to be adopted by the
	Company in accordance with the Share Option Scheme Rules on
	the Adoption Date
“Offer”	an offer for the grant of an Option made in accordance with the
	terms of the New Share Option Scheme
“Offer Date”	the date on which an Offer is made to an Eligible Option
	Participant(s)
“Option(s)”	any option(s) to be granted to Eligible Option Participant(s) to
	subscribe for new Share(s) under the New Share Option Scheme
“Option Period”	in respect of any particular Option, the period to be determined and
	notified by the Directors to the Grantee thereof at the time of
	making an Offer provided that such period shall not exceed the
	period of ten (10) years from the date of the grant of the particular
	Option but subject to the provisions for early termination thereof
	contained in the New Share Option Scheme
“Personal Representative(s)”	the person or persons who, in accordance with the laws of
	succession applicable in respect of the death of a Grantee, is or are
	entitled to be vested with the Awarded Shares granted to such
	Grantee (to the extent not already vested)
“PRC”	the People’s Republic of China, which for the purpose of this
	circular only excludes Hong Kong, the Macau Special
	Administrative Region of the PRC and Taiwan
“Returned Shares”	such Awarded Shares that are not vested and/or are forfeited in
	accordance with the terms of the Share Award Scheme, or such
	Shares being deemed to be so under the Share Award Scheme
	Rules

DEFINITIONS

“Scheme Limit”
“Selected Award Participant(s)”
“Selected Option Participant(s)”
“Selected Participant(s)”
“Service Provider(s)”

“Shareholder(s)”

“Share(s)”

the total number of Shares in respect of which Awards or Shares may be granted pursuant to the Share Award Scheme or the New Share Option Scheme and any other share schemes of the Company

any Eligible Award Participant(s) approved for participation in the Share Award Scheme and who has been granted any Award pursuant to the Share Award Scheme

any Eligible Option Participant(s) approved for participation in the New Share Option Scheme and who has been granted any Option pursuant to the New Share Option Scheme

Selected Award Participant(s) and/or Selected Option Participant(s), as the case may be

person(s) who provide services to any member of the Group on a continuing or recurring basis in its ordinary and usual course of business which are in the interests of the long term growth of the Group, which include any independent distributor, contractor, supplier, agent, consultant or adviser to any member of the Group: (i) where the continuity and frequency of their services are akin to those of employees of the Group; or (ii) after stepping down from an employment or director position with the Group, who provide advisory services, consultancy services and/or other professional services to the Company on areas relating to the Group's principal business activities in (i) network support services; (ii) network connectivity services that focus on providing intranet and internet connectivity solutions and value-added services; (iii) E- Commerce; and/or (iv) other business(es) that may be carried out by the Group from time to time that are desirable and necessary from a commercial perspective and help maintain or enhance the competitiveness of the Group, for example, offering specificindustry advice on the Group's business and financial or commercial strategy, and provided that any placing agent or financial adviser providing advisory services for fundraising, mergers or acquisitions, and other professional services provider such as auditor or valuer who provide assurance or are required to perform their services with impartiality and objectivity are excluded from such category and the Board shall have absolute discretion to determine whether or not one falls within such category

holder(s) of the Share(s)

ordinary share(s) of HK$0.01 each in the share capital of the Company

DEFINITIONS

“Share Award Scheme”	the share award scheme adopted by the Company in accordance
	with the Share Award Scheme Rules on the Adoption Date
“Share Award Scheme Rules”	the rules set out therein relating to the Share Award Scheme as
	amended from time to time
“Share Option Scheme”	the Existing Share Option Scheme and/or the New Share Option
	Scheme, as the case may be
“Share Option Scheme Rules”	the rules set out therein relating to the New Share Option Scheme
	as amended from time to time
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	the Hong Kong Code on Takeovers and Mergers
“Trust”	the trust constituted by the Trust Deed to service the Share Award
	Scheme
“Trust Deed”	the trust deed to be entered into between the Company and the
	Trustee (as may be restated, supplemented and amended from time
	to time)
“Trustee”	the trustee appointed by the Company for the purpose of the Trust,
	and initially, Orient Securities Limited, a company licensed to carry
	out Type 1 (dealing in securities), Type 4 (advising on securities)
	and Type 9 (asset management) regulated activities under the
	Securities and Futures Ordinance (Cap. 571 of the Laws of Hong
	Kong), who is an Independent Third Party
“Vesting Date(s)”	the date or dates, as determined from time to time by the Board, the
	committee of the Board or person to which the Board has delegated
	its authority, on which the Award or Option (or part thereof) is to
	vest in the relevant Selected Participant as set out in the relevant
	Award Letter pursuant to the Share Award Scheme Rules and/or the
	Share Option Scheme Rules, unless a different Vesting Date is
	deemed to occur in accordance with the Share Award Scheme Rules
	and/or the Share Option Scheme Rules
“HK$”	Hong Kong dollar(s), the lawful currency of Hong Kong
“%”	per cent.

LETTER FROM THE BOARD

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MICHONG METAVERSE (CHINA) HOLDINGS GROUP LIMITED 米虫元宇宙（中國）控股集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 8645)

Executive Directors: Mr. Yu Decai

(Chairman of the Board and Chief Executive Officer) Mr. Hu Mingdai

Independent non-executive Directors: Mr. Chen Youchun Mr. Ng Der Sian Ms. Zheng Li Ping

Registered Office: Windward 3, Regatta Office Park PO Box 1350 Grand Cayman KY1-1108 Cayman Islands

Head Office and Principal Place of Business in Hong Kong: Room 1910, 19/F, C C Wu Building 302-308 Hennessy Road Wan Chai, Hong Kong

Head Office and Principal Place of Business in Malaysia: No. 25, 25-1 & 25-3, Jalan MH 3 Taman Muzaffar Heights 75450 Ayer Keroh Melaka Malaysia

Principal Place of Business in PRC: Room 310-313, Building 7 WISCO High-tech Industrial Park No.5 Maodiam ShanZhong Road East Lake High-tech Development Zone Wuhan, the PRC

16 March 2023

To the Shareholders

Dear Sir or Madam,

(1) PROPOSED ADOPTION OF SHARE AWARD SCHEME; (2) TERMINATION OF EXISTING SHARE OPTION SCHEME AND PROPOSED ADOPTION OF THE NEW SHARE OPTION SCHEME; AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

1. INTRODUCTION

The Company proposes to (1) adopt the Share Award Scheme; and (2) terminate the Existing Share Option Scheme and adopt the New Share Option Scheme, subject to, among others, the approval by the Shareholders at the EGM.

LETTER FROM THE BOARD

The purpose of this circular is to provide you with details regarding (1) the proposed adoption of the Share Award Scheme; and (2) the termination of the Existing Share Option Scheme and the proposed adoption of the New Share Option Scheme in accordance with the GEM Listing Rules. A notice of the EGM is set out on pages EGM-1 to EGM-3 of this circular.

2. PROPOSED ADOPTION OF SHARE AWARD SCHEME

The Share Award Scheme will constitute a share scheme involving the grant of new Shares for the purposes of the Amended Rules. Pursuant to the Amended Rules, share schemes involving the grant of new shares must be approved by the shareholders of the listed issuer in general meeting. Accordingly, the adoption of the Share Award Scheme will be subject to, among others, the Shareholders’ approval at the EGM.

Purposes and objectives

The purposes and objectives of the Share Award Scheme are: (i) to recognise the contributions made by certain employees and persons to the Group; (ii) to provide the Eligible Award Participants with additional incentives in order to retain them for the continual operation and development of the Group; and (iii) to attract suitable personnel for further development of the Group.

The Board is of the view that the Share Award Scheme and the Share Option Scheme are two essential pillars in a comprehensive system of parallel incentive mechanism for employees, and the two share schemes do complement each other in terms of added motivation, increased flexibility and enhanced effectiveness in the Group’s continuing efforts to motivate and energise its personnel, as well as to reward and retain outstanding employees. The Awarded Shares under the Share Award Scheme and the Options under the Share Option Scheme are inherently different in nature. Whereas a Selected Award Participant under the Share Award Scheme is not required to pay any price to subscribe for the Awarded Shares upon their vesting, a Selected Option Participant is required to pay the subscription price to subscribe for the Shares when exercising the Options under the Share Option Scheme. Hence, the Selected Option Participant must have immediately available funds for the payments of the subscription prices. In addition, since the values of the Options would be reduced if the market prices of the Shares decline, the significance of Options as a favoured and an accepted means to provide incentives to the Option holders will also diminish accordingly. On the other hand, the Award of Awarded Shares may be less affected by Share price movements and may not incur further costs. As such, the Board believes that the adoption of the Share Award Scheme will provide the Company with an additional tool which is more thrifty, flexible and effective in rewarding the Group’s employees for their contributions to the Group.

Vesting period

The Directors consider that the Share Award Scheme, which will be valid for 10 years from the date of its adoption, will provide the Company with more flexibility in long-term planning of granting of the share awards to the Eligible Award Participants (including any employee, officer or director of any member of the Group) in a longer period in the future. Under the Share Award Scheme, the vesting period of Awards shall not be less than 12 months in general. However, the Board (or the

LETTER FROM THE BOARD

remuneration committee of the Company where it relates to grants of Awards to an Employee Participant who is a Director and/or senior manager of the Company) will have a discretion in allowing a shorter vesting period to an Employee Participant in the following circumstances:

(a) grants of “make-whole” Award(s) to new joiners to replace the share awards they forfeited when leaving the previous employers, which would provide talents with higher incentives in joining the Group for the Group's further development;
(b) grants to an Employee Participant whose employment is terminated due to death or occurrence of any out of control event, which allows flexibility for the Company to reward employees in exceptional circumstances to ensure fair treatment;
(c) grants that are made in batches during a year for administrative and compliance reasons, which include Awards that should have been granted earlier if not for such administrative or compliance reasons but had to wait for subsequent batch. In such case, the vesting period may be shorter to reflect the time from which the Award would have been granted, which allows flexibility for the Company to reward employees in case of delays due to administrative or compliance reasons;
(d) grants of Awards with a mixed or accelerated vesting schedule such as where the Awards may vest evenly over a period of twelve (12) months, which provides flexibility for the Company in granting Awarded Shares; or
(e) grants with performance-based vesting conditions in lieu of time-based vesting criteria, which allows flexibility for the Company to reward exceptional performers who fulfilled the performance targets in less than 12 months.

The Board is of the view that the discretion in allowing a shorter vesting period in each of the circumstances as detailed above is appropriate and in line with the requirements under the GEM Listing Rules and market practice. Such discretion gives the Company more flexibility to (i) provide higher incentives when attracting talents; (ii) reward exceptional performers with accelerated vesting; and (iii) grant awards in exceptional circumstances where justified, which is in line with the purposes of the Share Award Scheme.

Moreover, the Board or the committee of the Board or person to which the Board has delegated its authority (as the case may be) has the authority to establish performance targets in relation to the granting of the share awards. The Directors are of the view that the flexibility given to the Directors in relation to the vesting period and performance targets will place the Group in a better position to reward its employees and retain human resources that are valuable to the growth and development of the Group as a whole. None of the Directors is a trustee of the Share Award Scheme or has a direct or indirect interest in such trustee (if any).

Pursuant to the Share Award Scheme Rules, the Trustee however shall not exercise the voting rights in respect of any Awarded Shares. Currently there is no trustee arrangement for the New Share Option Scheme.

LETTER FROM THE BOARD

Eligible Award Participants

Eligible Award Participants under the Share Award Scheme include (a) the Employee Participant(s) and (b) the Service Provider(s), provided that the Board may have absolute discretion to determine whether or not one falls within the above categories.

With respect to Employee Participants, the Board will consider, amongst others, their general working experience, time commitment (full-time or part-time), length of their service within the Group, working experience, responsibilities and employment conditions according to the prevailing market practice and industry standard, or where appropriate, contribution or potential contribution to the revenue, profits or business development of the Group.

Set out below are the detailed description of each type of Service Providers and the specific criteria for determining the eligibility of each type of Service Providers under the Share Award Scheme:

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LETTER FROM THE BOARD

Type(s) of Service Providers	Type(s) of Service Providers		Criteria for determining eligibility under the Share Award Scheme
	Type(s) of Service Providers	Contributions of the Service Providers	Criteria for determining eligibility under the Share Award Scheme
Distributor	Distributor	Service Providers under this category are mainly distributors who/which support the Group’s business of (i) network support services mainly encompassing network infrastructure design and hardware installation, network management and security services; (ii) network connectivity services that focus on providing intranet and internet connectivity solutions and value-added services; (iii) E-Commerce; and/or (iv) other business(es) that may be carried out by the Group from time to time.	The Board will, on a case by case basis, take into account both qualitative and quantitative factors when determining the eligibility of such distributor, including but not limited to: (1) the monthly average number of products distributed by the relevant distributor; (2) the value of the products distributed by the relevant distributor; (3) the distribution network of the relevant distributor; (4) the frequency of collaboration and length of business relationship with the Group; (5) the materiality and nature of the business relationship with the Group (such as whether they relate to the core business of the Group and whether such business dealings could be readily replaced by third parties); (6) the background, reputation and track record of the relevant distributor; (7) the replacement cost of such distributor and/or the products or materials (including continuity and stability of distribution of such products or materials); and

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LETTER FROM THE BOARD

Type(s) of Service Providers		Criteria for determining eligibility under the Share Award Scheme
Type(s) of Service Providers	Contributions of the Service Providers	Criteria for determining eligibility under the Share Award Scheme
		(8) the potential and/or actual contribution to the business affairs of the Group, in particular, whether such distributor could bring positive impacts to the Group’s business, such as an increase in revenue or profits or a reduction in costs attributable to or brought by t h e s a l e s o f p r o d u c t s attributable to the distribution of products by the relevant distributor.
Supplier	Service Providers under this category are mainly suppliers of goods and services, who/which support the Group’s businesses of (i) network s u p p o r t s e r v i c e s m a i n l y encompassing network infrastructure design and hardware installation, network management and security services; (ii) network connectivity services that focus on providing intranet and internet connectivity solutions and value-added services; (iii) E-Commerce; and/or (iv) other business(es) that may be carried out by the Group from time to time.	The Board will, on a case by case basis, take into account both qualitative and quantitative factors when determining the eligibility of such supplier, including but not limited to: (1) the nature, reliability and quality of the goods or services supplied; (2) the value of the goods or services provided by the relevant supplier; (3) the frequency of collaboration and length of business relationship with the Group; (4) the materiality and nature of the business relationship with the Group (such as whether they relate to the core business of the Group and whether such business dealings could be readily replaced by third parties);

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LETTER FROM THE BOARD

Type(s) of Service Providers		Criteria for determining eligibility under the Share Award Scheme
Type(s) of Service Providers	Contributions of the Service Providers	Criteria for determining eligibility under the Share Award Scheme
		(5) the background, reputation and track record of the relevant supplier; (6) the replacement cost of such supplier and/or the goods or services (including continuity and stability of supply or provision of such goods or services); and (7) the potential and/or actual contribution to the business affairs of the Group, in particular, whether such supplier could bring positive impacts to the Group’s business, such as an increase in revenue or profits or a reduction in costs attributable to or brought by the goods or services supplied and/or provided by such supplier.
I n d e p e n d e n t contractor, agent, consultant and adviser	Service Providers under this category are mainly independent contractors, agents, consultants and advisers who p r o v i d e a d v i s o r y s e r v i c e s , consultancy services and/or other professional services to the Group on areas relating to the Group’s principal business activities in (i) network support services mainly encompassing network infrastructure design and hardware installation,	The Board will, on a case by case basis, take into account both qualitative and quantitative factors when determining the eligibility of such contractor, agent, consultant and/or adviser, including but not limited to: (1) individual performance of the relevant contractor, agent, consultant and/or adviser; (2) their knowledge, experience and network in the relevant industry; (3) the frequency of collaboration and length of business relationship with the Group;

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LETTER FROM THE BOARD

Type(s) of Service Providers		Criteria for determining eligibility under the Share Award Scheme
Type(s) of Service Providers	Contributions of the Service Providers	Criteria for determining eligibility under the Share Award Scheme
	network management and security services; (ii) network connectivity services that focus on providing intranet and internet connectivity solutions and value-added services; (iii) E-Commerce; and/or (iv) other principal business activity(ies) that may be carried out by the Group from time to time, or on areas that are desirable and necessary from a commercial perspective and help m a i n t a i n o r e n h a n c e t h e competitiveness of the Group by way of introducing new customers or business opportunities to the Group and/or applying their specialised skills and/or knowledge in the abovementioned fields.	(4) the materiality and nature of the business relationship with the Group (such as whether they relate to the core business of the Group and whether such business dealings could be readily replaced by third parties); (5) the background, reputation and track record of the relevant contractor, agent, consultant and/or adviser; (6) the potential and/or actual contribution to the business affairs of the Group, in particular, whether such contractor, agent, consultant and/or adviser could bring positive impacts to the Group’s business, such as an increase in revenue or profits or a reduction in costs attributable to or brought by services provided by such contractor, agent, consultant and/or adviser; (7) the replacement cost of such contractor, agent, consultant and/or adviser (including continuity and stability of provision of the necessary services); and (8) other factors, including but not limited to the capability, expertise, technical know-how and/or business connections of the relevant contractor, agent, consultant and/or adviser, and/

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LETTER FROM THE BOARD

Type(s) of Service Providers		Criteria for determining eligibility under the Share Award Scheme
Type(s) of Service Providers	Contributions of the Service Providers	Criteria for determining eligibility under the Share Award Scheme
		or the synergy between the relevant contractor, agent, consultant and/or adviser and the Group.

In view of the above, the Board (including the independent non-executive Directors) is of the view that the inclusion of Service Providers as Eligible Award Participants is fair and reasonable and aligns with the purposes of the Share Award Scheme. In addition, apart from the invaluable contributions from employees of the Group, the success of the Group also requires the co-operation and contribution from the (i) distributor; (ii) supplier; and (iii) independent contractor, agent, consultant and adviser as stated above, who provide or will provide services to the Group on a continuing and recurring basis in its ordinary and usual course of business. Thus, the Board (including the independent non-executive Directors) considers that it is in line with industry norm to include (i) distributor; (ii) supplier; and (iii) independent contractor, agent, consultant and adviser as Service Providers, and the terms of the grants (such as vesting requirements and performance targets, if any) align with the purposes of the Share Award Scheme.

Duration

Subject to any early termination as may be determined by the Board pursuant to the Share Award Scheme Rules, the Share Award Scheme shall be valid and effective for a term of 10 years commencing on the Adoption Date.

Appointment of Trustee

Orient Securities Limited has been appointed by the Company as the initial Trustee. To the best knowledge, information and belief of the Directors after making all reasonable enquiries, the initial Trustee and its ultimate beneficial owners are Independent Third Parties.

On the basis that (i) the Share Award Scheme is an employees’ share scheme established for a wide scope of participants, (ii) the maximum number of Shares underlying the Awards that can be awarded by the Board under the Share Award Scheme shall not exceed 10% of the total issued share capital of the Company from time to time, and (iii) the Directors’ aggregate interests in the Share Award Scheme would be less than 30%, the Trustee is not an associate of a connected person under Rule 20.10(1)(b) of the GEM Listing Rules.

By reason of holding Awarded Shares on trust for the Directors, the Trustee will become a core connected person under the GEM Listing Rules. To continuously meet the minimum public float requirement under Rule 11.23(7) of the GEM Listing Rules, the Company will take appropriate measures in implementing the Scheme, including but not limited to, that the Company will not instruct the Trustee to purchase Shares from public shareholders to the effect that the total issued Shares held by the public falls below the minimum public float requirement.

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Performance targets

The Board may at its discretion specify any condition in the Award Letter for the grant of the relevant Award which must be satisfied before the Awarded Shares may be vested. Save as determined by the Board and provided in the Award Letter for the grant of the relevant Award, there is no performance target which must be achieved before an Award can be vested under the terms of the Share Award Scheme nor any clawback mechanism for the Company to recover or withhold any Awards granted to any Eligible Award Participant. The Directors are of the view that the flexibility given to the Directors in relation to the performance targets will place the Group in a better position to reward its employees and retain human resources that are valuable to the growth and development of the Group as a whole. If performance targets are imposed upon grant of Awards, the Board will have regard to the purpose of the Share Award Scheme in assessing such performance targets, with reference to factors including but not limited to, as and when appropriate, sales performance (e.g. revenue), operating performance (e.g. profits, operation efficiency in term of cost control), financial performance (e.g. profits, cash flow, earnings, market capitalization, return on equity) of the Group, corporate sustainability parameter (e.g. timeliness and accuracy in handling customer feedback, team work capabilities, adherence to corporate culture) and discipline and responsibility (e.g. punctuality, integrity, honesty or compliance with internal business procedures), which satisfaction or not shall be assessed and determined by the Board at its sole discretion.

Conditions Precedent

The Share Award Scheme is conditional upon:

(a) the GEM Listing Committee granting the approval for the listing of, and permission to deal in any new Shares which may fall to be allotted and issued by the Company to the Trustee pursuant to the Share Award Scheme; and
(b) the passing of a resolution at a general meeting of the Company to approve the adoption of the Share Award Scheme and to authorise the Directors to grant Awards under the Share Award Scheme and to allot, issue, procure the transfer of and otherwise deal in the Awarded Shares in connection with the Share Award Scheme.

Scheme Limit

The maximum number of Shares which may be allotted and issued in respect of all Awards to be granted under the Share Award Scheme, all Options to be granted under the New Share Option Scheme, and the options and awards to be granted under any other share scheme(s) of the Company shall not in aggregate exceed 10% of the entire issued share capital of the Company as at the Adoption Date without the Shareholders’ approval.

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other share schemes for the time being of the Company to the Service Providers shall not exceed 6,000,000 Shares, being 1% of the issued share capital of the Company as at the Adoption Date (the “ Service Provider Sublimit ”).

The basis for determining the Service Provider Sublimit includes the potential dilution effect arising from grants to the Service Providers, the importance of striking a balance between achieving the purpose of the Share Award Scheme and protecting Shareholders from the dilution effect from granting the Awards to the Service Providers, the actual or expected increase in the Group’s revenue or profits which is attributable to the Service Providers and the extent of use of Service Provider(s) in the Group’s business, as well as to ensure sufficient amount of awards would be available to be granted to the Employee Participants. Considering the fact that (i) the individual limit under Rule 23.03D(1) of the GEM Listing Rules is also 1%; (ii) the sublimit of 1% would not lead to excessive dilution of the existing Shareholders’ shareholdings; (iii) there is no other share schemes involving grant of awards of the Company; (iv) due to the hiring practice and organisational structures of the Group, certain Service Providers, in particular, the independent contractors, agents, consultants and/or advisers, which provide services akin to employees of the Group, may not be able to serve as fulltime or part-time employees of the Group. For example, these Service Providers may have stepped down from position of the Group, or they may be seasoned people in their own fields and professionals with many business connections whom the Group may not be able to recruit them as employees, or they may prefer to be employed on self-employed basis, and the Board considers that it is in line with industry norm to co-operate with such former employees or former management or seasoned professionals by engaging them as service providers instead of employing them as full-time or part-time employees. As these Service Providers are either former management or former employees of the Group, or are personnel who have worked for the Group where the continuity and frequency of their services were akin to those of employees, the Group values their familiarity with the businesses and operation of the Group and the industry in general and their deep understanding of the Group, and considers that their contribution to the Group is similar to those of the employees of the Group; and (v) the Service Providers have contributed to the long-term growth of the Company’s business, and that the Share Award Scheme could incentivise Service Providers who/which supply reliable and high-quality services to the Group on a long-term basis, the Board is of the view that the Service Provider Sublimit is appropriate and reasonable. The Service Provider Sublimit is subject to separate approval by the Shareholders at the EGM.

Based on 600,000,000 Shares in issue as at the Latest Practicable Date and assuming that there is no change in the issued share capital of the Company before the EGM, the maximum number of Shares which may be allotted and issued in respect of all Awards and Options to be granted under the Share Award Scheme and the New Share Option Scheme, respectively, and the options and awards to be granted under any other share scheme(s) is 60,000,000 Shares.

A summary of the principal terms of the Share Award Scheme are set out in Appendix I to this circular. A copy of the Share Award Scheme will be published on the websites of the Stock Exchange (www.hkexnews.com.hk) and the Company at www.metamichong.com for a period of not less than 14 days before the date of the EGM and is also made available for inspection at the EGM.

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3. TERMINATION OF EXISTING SHARE OPTION SCHEME AND PROPOSED ADOPTION OF THE NEW SHARE OPTION SCHEME

Termination of Existing Share Option Scheme

The Existing Share Option Scheme was conditionally adopted by resolutions in writing passed by the Shareholders on 11 November 2019. Under the Existing Share Option Scheme, the Directors were authorised to grant to any executive, non-executive Directors and independent non-executive Directors, advisers, consultants of the Group the options to subscribe for Shares as incentives or rewards in their contribution to the Group.

The maximum number of Shares that may be granted under the Existing Share Option Scheme was 60,000,000 Shares, representing 10% of the total issued Shares as at 25 November 2019, being the listing date of the Company on the Stock Exchange. The total number of Shares available for issue under the Existing Share Option Scheme was 60,000,000 Shares, representing approximately 10% of the then total number of issued Shares as at the date of adoption of the Existing Share Option Scheme on 11 November 2019 and the maximum number of Shares that might be issued upon the exercise of all share options under the Existing Share Option Scheme. As at the Latest Practicable Date, the Company did not have any share options granted pursuant to the Existing Share Option Scheme which remained outstanding and not exercised.

Proposed adoption of the New Share Option Scheme

In light of the Amended Rules, the Board proposes to seek approval by the Shareholders by way of ordinary resolution at the EGM to adopt the New Share Option Scheme and terminate the Existing Share Option Scheme. A summary of the principal terms of the Share Option Scheme Rules is set out in Appendix II hereto.

Purpose

The purpose of the New Share Option Scheme is to attract and retain the best available personnel of the Group, to provide additional incentive to the Eligible Option Participants and to promote the success of the business of the Group. The New Share Option Scheme will give the Eligible Option Participants an opportunity to have a personal stake in the Company and will help motivate the Eligible Option Participants in optimising their performance and efficiency and attract and retain the Eligible Option Participants whose contributions are important to the long-term growth and profitability of the Group.

Upon termination of the Existing Share Option Scheme, no further options will be granted thereunder. However, the provisions of the Existing Share Option Scheme will remain in full force and effect to the extent necessary to give effect to the exercise of options granted (if any) prior to its termination or otherwise as may be required in accordance with the rules of the Existing Share Option Scheme. As at the Latest Practicable Date, no option has been granted under the Existing Share Option Scheme and the Board confirms that it will not grant any options under the Existing Share Option Scheme prior to the EGM.

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Vesting Period

The Directors consider that the New Share Option Scheme, which will be valid for 10 years from the date of its adoption, will provide the Company with more flexibility in long-term planning of granting of the share options to the Eligible Option Participants (including any employee, officer or director of any member of the Group) in a longer period in the future. Under the New Share Option Scheme, the vesting period of Options shall not be less than 12 months in general. However, the Board (or the remuneration committee of the Company where it relates to grants of options to an Employee Participant who is a Director and/or senior manager of the Company) will have a discretion in allowing a shorter vesting period to an Employee Participant in the following circumstances:

(a) grants of “make-whole” Option(s) to new joiners to replace the share options they forfeited when leaving the previous employers, which would provide talents with higher incentives in joining the Group for the Group’s further development;
(b) grants to an Employee Participant whose employment is terminated due to death or occurrence of any out of control event, which allows flexibility for the Company to reward employees in exceptional circumstances to ensure fair treatment;
(c) grants that are made in batches during a year for administrative and compliance reasons, which include Options that should have been granted earlier if not for such administrative or compliance reasons but had to wait for subsequent batch. In such case, the vesting period may be shorter to reflect the time from which the Option would have been granted which allows flexibility for the Company to reward employees in case of delays due to administrative or compliance reasons;
(d) grants of Options with a mixed or accelerated vesting schedule such as where the Options may vest evenly over a period of twelve (12) months, which provides flexibility for the Company in granting Options; or
(e) grants with performance-based vesting conditions in lieu of time-based vesting criteria, which allows flexibility for the Company to reward exceptional performers who fulfilled the performance targets in less than 12 months.

The Board is of the view that the discretion in allowing a shorter vesting period in each of the circumstances as detailed above is appropriate and in line with the requirements under the GEM Listing Rules and market practice. Such discretion gives the Company more flexibility to (i) provide higher incentives when attracting talents; (ii) reward exceptional performers with accelerated vesting; and (iii) grant Options in exceptional circumstances where justified, which is in line with the purpose of the New Share Option Scheme.

Moreover, the Board or the committee of the Board or person to which the Board has delegated its authority (as the case may be) has the authority to establish performance targets in relation to the granting of the Options. The Directors are of the view that the flexibility given to the Directors in relation to the vesting period and performance targets will place the Group in a better position to reward its employees and retain human resources that are valuable to the growth and development of

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the Group as a whole. None of the Directors is a trustee of the New Share Option Scheme or has a direct or indirect interest in such trustee (if any). Currently there is no trustee arrangement for the New Share Option Scheme.

Eligible Option Participants

Eligible Option Participants under the New Share Option Scheme include (a) the Employee Participant(s) and (b) the Service Provider(s), provided that the Board may have absolute discretion to determine whether or not one falls within the above categories.

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Set out below are the detailed description of each type of Service Providers and the specific criteria for determining the eligibility of each type of Service Providers under the New Share Option Scheme:

Type(s) of Service Providers	Type(s) of Service Providers		Criteria for determining eligibility under the New Share Option Scheme
	Type(s) of Service Providers	Contributions of the Service Providers	Criteria for determining eligibility under the New Share Option Scheme
Distributor	Distributor	Service Providers under this category are mainly distributors who/which support the Group’s business of (i) network support services mainly encompassing network infrastructure design and hardware installation, network management and security services; (ii) network connectivity services that focus on providing intranet and internet connectivity solutions and value- added services; (iii) E-Commerce; and/or (iv) other business(es) that may be carried out by the Group from time to time.	The Board will, on a case by case basis, take into account both qualitative and quantitative factors when determining the eligibility of such distributor, including but not limited to: (1) the monthly average number of products distributed by the relevant distributor; (2) the value of the products distributed by the relevant distributor; (3) the distribution network of the relevant distributor; (4) the frequency of collaboration and length of business relationship with the Group; (5) the materiality and nature of the business relationship with the Group (such as whether they relate to the core business of the Group and whether such business dealings could be readily replaced by third parties); (6) the background, reputation and track record of the relevant distributor; (7) the replacement cost of such distributor and/or the products or materials (including continuity and stability of distribution of such products or materials); and (8) the potential and/or actual contribution to the business affairs of the Group, in particular, whether such distributor could bring positive impacts to the Group’s business, such as an increase in revenue or profits or a reduction in costs attributable to or brought by the sales of products attributable to the distribution of products by the relevant distributor.

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LETTER FROM THE BOARD

Type(s) of Service Providers	Type(s) of Service Providers		Criteria for determining eligibility under the New Share Option Scheme
	Type(s) of Service Providers	Contributions of the Service Providers	Criteria for determining eligibility under the New Share Option Scheme
Supplier	Supplier	Service Providers under this category are mainly suppliers of goods and services, who/which support the Group’s businesses of (i) network support services mainly encompassing network infrastructure design and hardware installation, network management and security services; (ii) network connectivity services that focus on providing intranet and internet connectivity solutions and value-added services; (iii) E-Commerce; and/or (iv) other business(es) that may be carried out by the Group from time to time.	The Board will, on a case by case basis, take into account both qualitative and quantitative factors when determining the eligibility of such supplier, including but not limited to: (1) the nature, reliability and quality of goods or services supplied; (2) the value of goods or services provided by the relevant supplier; (3) the frequency of collaboration and length of business relationship with the Group; (4) the materiality and nature of the business relationship with the Group (such as whether they relate to the core business of the Group and whether such business dealings could be readily replaced by third parties); (5) the background, reputation and track record of the relevant supplier; (6) the replacement cost of such supplier and/or the goods or services (including continuity and stability of supply or provision of such raw materials, goods, livestock or services); and (7) the potential and/or actual contribution to the business affairs of the Group, in particular, whether such supplier could bring positive impacts to the Group’s business, such as an increase in revenue or profits or a reduction in costs attributable to or brought by the goods or services supplied and/or provided by such supplier.

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Type(s) of Service Providers	Type(s) of Service Providers		Criteria for determining eligibility under the New Share Option Scheme
	Type(s) of Service Providers	Contributions of the Service Providers	Criteria for determining eligibility under the New Share Option Scheme
Independent contractor, agent, consultant and adviser	Independent contractor, agent, consultant and adviser	Service Providers under this category are mainly independent contractors, agents, consultants and advisers who provide advisory services, consultancy services and/or other professional services to the Group on areas relating to the Group’s principal business activities in (i) network support services mainly encompassing network infrastructure design and hardware installation, network management and security services; (ii) network connectivity services that focus on providing intranet and internet connectivity solutions and value-added services; (iii) E-Commerce; and/or (iv) other principal business activity(ies) that may be carried out by the Group from time to time, or on areas that are desirable and necessary from a commercial perspective and help maintain or enhance the competitiveness of the Group by way of introducing new customers or business opportunities to the Group and/or applying their specialised skills and/or knowledge in the abovementioned fields.	The Board will, on a case by case basis, take into account both qualitative and quantitative factors when determining the eligibility of such contractor, agent, consultant and/or adviser, including but not limited to: (1) individual performance of the relevant contractor, agent, consultant and/or adviser; (2) their knowledge, experience and network in the relevant industry; (3) the frequency of collaboration and length of business relationship with the Group; (4) the materiality and nature of the business relationship with the Group (such as whether they relate to the core business of the Group and whether such business dealings could be readily replaced by third parties); (5) the background, reputation and track record of the relevant contractor, agent, consultant and/or adviser; (6) the potential and/or actual contribution to the business affairs of the Group, in particular, whether such contractor, agent, consultant and/or adviser could bring positive impacts to the Group’s business, such as an increase in revenue or profits or a reduction in costs attributable to or brought by services provided by such contractor, agent, consultant and/or adviser; (7) the replacement cost of such contractor, agent, consultant and/or adviser (including continuity and stability of provision of the necessary services); and (8) other factors, including but not limited to the capability, expertise, technical know-how and/or business connections of the relevant contractor, agent, consultant and/or adviser, and/or the synergy between the relevant contractor, agent, consultant and/or adviser and the Group.

In view of the above, the Board (including the independent non-executive Directors) is of the view that the inclusion of Service Providers as Eligible Option Participants is fair and reasonable and aligns with the purpose of the New Share Option Scheme.

Duration

Subject to any early termination as may be determined by the Board pursuant to the Share Option Scheme Rules, the New Share Option Scheme shall be valid and effective for a term of 10 years commencing on the Adoption Date.

Performance targets

The Board may at its discretion specify any condition in the offer letter at the grant of the relevant Option which must be satisfied before an Option may be exercised. Save as determined by the Board and provided in the offer letter of the grant of the relevant Option, there is no performance target

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which must be achieved before an Option can be exercised under the terms of the New Share Option Scheme nor any clawback mechanism for the Company to recover or withhold any Options granted to any Eligible Option Participant. The Directors are of the view that the flexibility given to the Directors in relation to the performance targets will place the Group in a better position to reward its employees and retain human resources that are valuable to the growth and development of the Group as a whole. If performance targets are imposed upon grant of Options, the Board will have regard to the purpose of the New Share Option Scheme in assessing such performance targets, with reference to factors including but not limited to, as and when appropriate, sales performance (e.g. revenue), operating performance (e.g. profits, operation efficiency in term of cost control), financial performance (e.g. profits, cash flow, earnings, market capitalization, return on equity) of the Group, corporate sustainability parameter (e.g. timeliness and accuracy in handling customer feedback, team work capabilities, adherence to corporate culture) and discipline and responsibility (e.g. punctuality, integrity, honesty or compliance with internal business procedures), the satisfaction of which shall be assessed and determined by the Board at its sole discretion.

Conditions precedent of the New Share Option Scheme

The adoption of the New Share Option Scheme is conditional upon:

(a) the GEM Listing Committee granting the approval for the listing of, and permission to deal in any new Shares which may fall to be allotted and issued by the Company upon the exercise of Options that may be granted under the New Share Option Scheme; and
(b) the passing of an ordinary resolution at the EGM approving the termination of the Existing Share Option Scheme, the adoption of the New Share Option Scheme and authorising the Directors to grant Options to Eligible Option Participants and to allot and issue Shares pursuant to the exercise of any Option granted under the New Share Option Scheme.

Scheme Limit

Within the Scheme Limit, the maximum number of Shares which may be issued in respect of all Awarded Shares and Options which may be granted at any time under the Share Award Scheme and the New Share Option Scheme, together with options and awards which may be granted under any other share schemes for the time being of the Company to the Service Providers shall not exceed the Service Provider Sublimit (i.e. 6,000,000 Shares, being 1% of the issued share capital of the Company as at the Adoption Date).

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granting the Options to the Service Providers, the actual or expected increase in the Group’s revenue or profits which is attributable to the Service Providers and the extent of use of Service Provider(s) in the Group’s business, as well as to ensure sufficient amount of awards would be available to be granted to the Employee Participants. Considering the fact that (i) the individual limit under Rule 23.03D(1) of the GEM Listing Rules is also 1%; (ii) the sublimit of 1% would not lead to excessive dilution of the existing Shareholders’ shareholdings; (iii) the Existing Share Option Scheme will be terminated upon Shareholders’ approval; (iv) due to the hiring practice and organisational structures of the Group, certain Service Providers, in particular, the independent contractors, agents, consultants and/or advisers, which provide services akin to employees of the Group, may not be able to serve as full-time or part-time employees of the Group. For example, these Service Providers may have stepped down from position of the Group, or they may be seasoned people in their own fields and professionals with many business connections whom the Group may not be able to recruit them as employees, or they may prefer to be employed on self-employed basis, and the Board considers that it is in line with industry norm to co-operate with such former employees or former management or seasoned professionals by engaging them as service providers instead of employing them as full-time or part-time employees. As these Service Providers are either former management or former employees of the Group, or are personnel who have worked for the Group where the continuity and frequency of their services were akin to those of employees, the Group values their familiarity with the businesses and operation of the Group and the industry in general and their deep understanding of the Group, and considers that their contribution to the Group is similar to those of the employees of the Group; and (v) the Service Providers have contributed to the long-term growth of the Company’s business, and that the New Share Option Scheme could incentivise Service Providers who/which supply reliable and high-quality services to the Group on a long-term basis, the Board is of the view that the Service Provider Sublimit is appropriate and reasonable. The Service Provider Sublimit is subject to separate approval by the Shareholders at the EGM.

To the best knowledge, information and belief of the Directors having made all reasonable enquiries, as at the Latest Practicable Date, no Shareholder had any material interest in the adoption of the New Share Option Scheme. Accordingly, no Shareholder is required to abstain from voting on the resolution approving the termination of the Existing Share Option Scheme and the adoption of the New Share Option Scheme at the EGM.

The Company will, where applicable, comply with the applicable requirements under Chapter 23 of the GEM Listing Rules in respect of the operation of the New Share Option Scheme.

Value of the Options

The Directors consider that it is not appropriate to state the value of all the Options that can be granted under the New Share Option Scheme as if they had been granted at the Latest Practicable Date prior to the approval of the New Share Option Scheme given that the variables which are crucial

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for the calculation of the value of such Option cannot be determined. The variables which are critical for the determination of the value of such Options include the subscription price payable for the Shares upon the exercise of the Options, whether or not Options will be granted under the New Share Option Scheme, and if so, the number of Options to be granted and the timing of the granting of such Options, the period during which the subscription rights may be exercised and any other conditions that the Board may impose with respect to the Options and whether or not such Options if granted will be exercised by the holders of the Option. Accordingly, the Directors are of the view that the value of the Options depends on a number of variables which are either difficult to ascertain or can only be ascertained subject to a number of theoretical and speculative assumptions. Accordingly, the Directors believe that any calculation of the value of the Options will not be meaningful and may be misleading to Shareholders in the circumstances.

As at the Latest Practicable Date, other than the Existing Share Option Scheme, the Company currently does not have any other share schemes.

4. GENERAL

No Director has a material interest and is required to abstain from voting on the resolutions approving (1) the adoption of the Share Award Scheme; and (2) the termination of the Existing Share Option Scheme and adoption of the New Share Option Scheme at the EGM. None of the Shareholders is required to abstain from voting on such resolutions at the EGM pursuant to the GEM Listing Rules and/or the Articles of Association.

Application will be made to the GEM Listing Committee for the approval of the listing of, and permission to deal in, the new Shares to be granted under the Share Award Scheme and the Shares which may fall to be issued and allotted pursuant to the exercise of any Option that may be granted under the New Share Option Scheme.

As at the Latest Practicable Date, the Board (1) intended to grant Awarded Shares in the coming 12 months upon the adoption of the Share Award Scheme but had not formulated any concrete plan regarding the timing and scale of the potential grant(s); and (2) had no concrete plan to grant Options under the New Share Option Scheme.

The Company has sought legal advices in respect of the Share Award Scheme and the New Share Option Scheme and understands that whilst the Share Award Scheme and the New Share Option Scheme are not restricted to executives and employees of the Group, the adoption of the Share Award Scheme and the New Share Option Scheme would not constitute offer to public and prospectus requirements under Companies (Winding Up and Miscellaneous Provisions) Ordinance are not applicable.

5. THE EGM AND PROXY ARRANGEMENT

A notice convening the EGM to be held at the conference room, Room A3, 7/F, Noble Financial Center, No.1006, Fuzhongsan Road, Futian District, Shenzhen, the PRC on Friday, 14 April 2023 at 10:30 a.m. is set out on pages EGM-1 to EGM-3 of this circular. At the EGM, ordinary resolutions

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will be proposed to approve, inter alia, (i) the proposed adoption of the Share Award Scheme; and (ii) the termination of the Existing Share Option Scheme and the proposed adoption of the New Share Option Scheme.

A form of proxy for use at the EGM is enclosed with this circular and such form of proxy is also published on the websites of the Stock Exchanges (www.hkexnews.hk) and the Company (www.metamichong.com). To be valid, the form of proxy must be completed and signed in accordance with the instructions printed thereon and deposited, together with the power of attorney or other authority (if any) under which it is signed or a certified copy of that power of attorney or authority, at the Company’s branch share registrar and transfer office, Computershare Hong Kong Investor Services Limited, at 17M/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the EGM (i.e. not later than 10:30 a.m., on Wednesday, 12 April 2023 (Hong Kong time)) or the adjourned meeting (as the case may be). Completion and delivery of the form of proxy will not preclude you from attending and voting at the EGM if you so wish.

Pursuant to Rule 17.47(4) of the GEM Listing Rules, any vote of the Shareholders at the EGM must be taken by poll. The chairman of the meeting will therefore demand a poll for every resolution to be passed at the EGM pursuant to the Articles of Association. An announcement on the poll results of the EGM will be made by the Company after the EGM, in the manner prescribed under Rule 17.47(5) of the GEM Listing Rules.

The register of members of the Company for the EGM will be closed from Tuesday, 11 April 2023 to Friday, 14 April 2023, both days inclusive, during which no transfer of Shares will be registered. In order to qualify for attending and voting at the EGM or any adjournment thereof, all transfers documents by the relevant share certificates must be lodged with the Company’s Hong Kong branch share registrar and transfer office, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not later than 4:30 p.m. on Thursday, 6 April 2023.

6. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information relating to the Group. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

7. RECOMMENDATIONS

The Directors (including the Independent non-executive Directors) are of the view that (i) the adoption of the Share Award Scheme; and (ii) the termination of the Existing Share Option Scheme and the adoption of the New Share Option Scheme are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of all the resolutions as set out in the notice of the EGM.

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8. DOCUMENT ON DISPLAY

A copy of (i) the Share Award Scheme Rules; and (ii) the Share Option Scheme Rules will be published on the websites of the Stock Exchange and the Company for display for a period of not less than 14 days before the date of the EGM and (i) the Share Award Scheme Rules; and (ii) the Share Option Scheme Rules will be made available for inspection at the EGM.

9. COMPETING INTEREST

As at the Latest Practicable Date, none of the Directors, controlling Shareholders or substantial Shareholders or any of their respective close associates has any interest in business which competes with or may compete with the business of the Group or has any other conflict of interests which any person has or may have with the Group.

10. ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the Appendices to this circular.

Yours faithfully For and on behalf of the Board

Michong Metaverse (China) Holdings Group Limited Yu Decai

Executive Director, Chairman and Chief Executive Officer

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APPENDIX I

PRINCIPAL TERMS OF THE SHARE AWARD SCHEME

The following is a summary of the principal terms of the Share Award Scheme to be approved and adopted by ordinary resolution at the EGM, but such summary does not form part of, nor was it intended to be, part of the Share Award Scheme, nor should it be taken as affecting the interpretation of the rules of the Share Award Scheme:

1. PURPOSE

The purposes of the Share Award Scheme are:

(a) to recognise the contributions by certain employees and persons to the Group;
(b) to provide the Eligible Award Participants with additional incentives in order to retain them for the continual operation and development of the Group; and
(c) to attract suitable personnel for further development of the Group.

2. CONDITIONS

The Share Award Scheme is conditional upon:

(a) the GEM Listing Committee granting the approval for the listing of, and permission to deal in any new Shares which may fall to be allotted and issued by the Company to the Trustee pursuant to the Share Award Scheme; and
(b) the passing of a resolution at a general meeting of the Company to approve the adoption of the Share Award Scheme and to authorise the Directors to grant Awards under the Share Award Scheme and to allot, issue, procure the transfer of and otherwise deal in the Awarded Shares in connection with the Share Award Scheme.

3. DURATION

Subject to the Share Award Scheme Rules, the Share Award Scheme shall be valid and effective for the Award Period (after which no further Awards will be granted), and thereafter for so long as there are any non-vested Awarded Shares granted hereunder prior to the expiration of the Share Award Scheme, in order to give effect to the vesting of such Awarded Shares or otherwise as may be required in accordance with the provisions of the Share Award Scheme Rules.

The Board may at its discretion specify any condition in the Award Letter at the grant of the relevant Award which must be satisfied before the Awarded Shares may be vested. Save as determined by the Board and provided in the Award Letter of the grant of the relevant Award, there is no performance target which must be achieved before an Award can be vested under the terms of the Share Award Scheme nor any clawback mechanism for the Company to recover or withhold any Awards granted to any Eligible Award Participant. The Awarded Shares, once issued to the Selected Participants upon the Vesting Date, will rank pari passu to all other fully paid Shares in issue.

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PRINCIPAL TERMS OF THE SHARE AWARD SCHEME

APPENDIX I

4. ADMINISTRATION

The Share Award Scheme shall be subject to the administration of the Board in accordance with the Share Award Scheme Rules and where applicable, the Trust Deed. A decision of the Board or the committee of the Board or person to which the Board has delegated its authority shall (save as otherwise provided herein and in the absence of manifest error) be final and binding on all persons affected thereby.

Subject to the Share Award Scheme Rules, the Listing Rules and any applicable law and regulations, the Board and the committee of the Board or person to which the Board has delegated its authority shall have the power, inter alia , from time to time to:

(a) construe and interpret the Share Award Scheme Rules and the terms of the Awards granted under the Share Award Scheme;
(b) make or vary such arrangements, guidelines, procedures and/or regulations for the administration, interpretation, implementation and operation of the Share Award Scheme, provided that they are not inconsistent with the Share Award Scheme Rules;
(c) decide how the vesting of the Awarded Shares will be settled pursuant to the Share Award Scheme Rules;
(d) grant Awards to those Eligible Award Participants whom it shall select from time to time;
(e) determine the terms and conditions of the Awards;
(f) determine the commencement or termination date of an Eligible Award Participant’s employment with any member of the Group or any Affiliate;
(g) establish and administer performance targets in respect of the Share Award Scheme;
(h) approve the form of an Award Letter; and
(i) take such other steps or actions to give effect to the terms and intent of the Share Award Scheme Rules.

5. ELIGIBLE AWARD PARTICIPANTS

Under the Share Award Scheme Rules, the following classes of participants (excluding the Excluded Participants) are eligible for participation in the Share Award Scheme:

(a) Employee Participant(s) including the director(s) and employee(s) (whether full-time or parttime) of any member of the Group (including persons who are granted Awards under the Share Award Scheme as inducement to enter into employment contracts with the Group); and
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(b) Service Provider(s) including person(s) who provide services to any members of the Group on a continuing or recurring basis in its ordinary and usual course of business which are in the interests of the long term growth of the Group, which include any independent distributor, contractor, supplier, agent, consultant or adviser to any member of the Group (where the continuity and frequency of their services are akin to those of employees of the Group), but exclude any placing agent or financial adviser providing advisory services for fundraising, mergers or acquisitions, and other professional services provider such as auditor or valuer,

provided that the Board may, from time to time, at its absolute discretion select any Eligible Award Participant to be a Selected Participant.

In determining the basis of eligibility of each Eligible Award Participants, the Board would take into account (i) the experience of the Eligible Award Participant on the Group’s business; (ii) the length of service of the Eligible Award Participant with the Group (if the Eligible Award Participant is an Employee Participant); (iii) the actual degree of involvement in and/or cooperation with the Group and length of collaborative relationship the Eligible Award Participant has established with the Group (if the Eligible Award Participant is a Service Provider); and (iv) the amount of support, assistance, guidance, advice, efforts and contributions the Eligible Award Participant has exerted and given towards the success of the Group and/or the amount of potential support, assistance, guidance, advice, efforts and contributions the Eligible Award Participant is likely to be able to give or make towards the success of the Group in the future.

For Service Providers, the factors in assessing whether such Service Provider is eligible to participate in the Share Award Scheme include, in particular: (i) the individual performance of relevant Service Providers; (ii) the length of business relationship with the Group; (iii) the materiality and nature of the business relationship with the Group (such as whether they relate to the core business of the Group and whether such business dealings could be readily replaced by third parties); (iv) track record in the quality of services provided to and/or cooperation with the Group; and (v) the scale of business dealings with the Group with regard to factors such as the actual or expected change in the Group’s revenue or profits which is or may be attributable to the Service Provider.

Further, with respect to the eligibility of each category of the Service Providers, the Board will, on a case by case basis, specifically consider the following factors:

(1) Distributor

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services that focus on providing intranet and internet connectivity solutions and value-added services; (iii) E-Commerce; and/or (iv) other business(es) that may be carried out by the Group from time to time.

The Board will, on a case by case basis, take into account both qualitative and quantitative factors when determining the eligibility of such distributor, including but not limited to: (1) the monthly average number of products distributed by the relevant distributor; (2) the value of the products distributed by the relevant distributor; (3) the distribution network of the relevant distributor; (4) the frequency of collaboration and length of business relationship with the Group; (5) the materiality and nature of the business relationship with the Group (such as whether they relate to the core business of the Group and whether such business dealings could be readily replaced by third parties); (6) the background, reputation and track record of the relevant distributor; (7) the replacement cost of such distributor and/or the products or materials (including continuity and stability of distribution of such products or materials); and (8) the potential and/or actual contribution to the business affairs of the Group, in particular, whether such distributor could bring positive impacts to the Group’s business, such as an increase in revenue or profits or a reduction in costs attributable to or brought by the sales of products attributable to the distribution of products by the relevant distributor.

(2) Supplier

Service Providers under this category are mainly suppliers of goods and services, who/which support the Group’s businesses of (i) network support services mainly encompassing network infrastructure design and hardware installation, network management and security services; (ii) network connectivity services that focus on providing intranet and internet connectivity solutions and value-added services; (iii) E-Commerce; and/or (iv) other business(es) that may be carried out by the Group from time to time.

The Board will, on a case by case basis, take into account both qualitative and quantitative factors when determining the eligibility of such supplier, including but not limited to: (1) the nature, reliability and quality of the goods or services supplied; (2) the value of the goods or services provided by the relevant supplier; (3) the frequency of collaboration and length of business relationship with the Group; (4) the materiality and nature of the business relationship with the Group (such as whether they relate to the core business of the Group and whether such business dealings could be readily replaced by third parties); (5) the background, reputation and track record of the relevant supplier; (6) the replacement cost of such supplier and/or the goods or services (including continuity and stability of supply or provision of such goods or services); and (7) the potential and/or actual contribution to the business affairs of the Group, in particular, whether such supplier could bring positive impacts to the Group’s business, such as an increase in revenue or profits or a reduction in costs attributable to or brought by the goods or services supplied and/or provided by such supplier.

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(3) Independent contractor, agent, consultant and adviser

Service Providers under this category are mainly independent contractors, agents, consultants and advisers who provide advisory services, consultancy services and/or other professional services to the Group on areas relating to the Group’s principal business activities in (i) network support services mainly encompassing network infrastructure design and hardware installation, network management and security services; (ii) network connectivity services that focus on providing intranet and internet connectivity solutions and value-added services; (iii) E-Commerce; and/or (iv) other principal business activity(ies) that may be carried out by the Group from time to time, or on areas that are desirable and necessary from a commercial perspective and help maintain or enhance the competitiveness of the Group by way of introducing new customers or business opportunities to the Group and/or applying their specialised skills and/or knowledge in the abovementioned fields.

The Board will, on a case by case basis, take into account both qualitative and quantitative factors when determining the eligibility of such contractor, agent, consultant and/or adviser, including but not limited to: (1) individual performance of the relevant contractor, agent, consultant and/or adviser; (2) their knowledge, experience and network in the relevant industry; (3) the frequency of collaboration and length of business relationship with the Group; (4) the materiality and nature of the business relationship with the Group (such as whether they relate to the core business of the Group and whether such business dealings could be readily replaced by third parties); (5) the background, reputation and track record of the relevant contractor, agent, consultant and/or adviser; (6) the potential and/or actual contribution to the business affairs of the Group, in particular, whether such contractor, agent, consultant and/or adviser could bring positive impacts to the Group’s business, such as an increase in revenue or profits or a reduction in costs attributable to or brought by services provided by such contractor, agent, consultant and/or adviser; (7) the replacement cost of such contractor, agent, consultant and/or adviser (including continuity and stability of provision of the necessary services); and (8) other factors, including but not limited to the capability, expertise, technical know-how and/or business connections of the relevant contractor, agent, consultant and/or adviser, and/or the synergy between the relevant contractor, agent, consultant and/or adviser and the Group.

6. GRANT OF AWARDS

Subject to the Share Award Scheme Rules, the Share Award Scheme shall be valid and effective for the period of 10 years commencing on the Adoption Date, and ending on the Business Day immediately prior to the tenth anniversary of the Adoption Date (after which no further Awards will be granted).

The Company shall issue an Award Letter to each Selected Award Participant in such form as the Board or the committee of the Board or person to which the Board has delegated its authority may from time to time determine, specifying the Grant Date, the number of Awarded Shares underlying the Award, the vesting criteria and conditions, and the Vesting Date and such other details as they may consider necessary.

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As soon as practicable after the grant of an Award to a Selected Award Participant, the Company shall notify the Trustee of:

(a) the name, address, identity card/passport number and position of the relevant Selected Participant, and whether the Selected Participant is a connected person as defined in the Listing Rules;
(b) the number of Awarded Shares to which such Award relates;
(c) the date and conditions (if any) of vesting of such Award;
(d) the performance targets (if any) that must be achieved before any of the Awarded Shares may be vested in the Selected Participant under such Award;
(e) such other terms and conditions relating to such Award which are in the opinion of the Company fair and reasonable and are not inconsistent with the Share Award Scheme Rules; and
(f) the manner and number of the Awarded Shares to be obtained by the Trustee pursuant to the Share Award Scheme Rules.

7. VESTING OF AWARDS

Save for the circumstances prescribed below, an Award must be held by the Grantee for at least twelve (12) months before the Awarded Shares can be vested (the “ Vesting Period ”).

The Board (or the remuneration committee of the Company where it relates to grants of Awards to an Employee Participant who is a Director and/or senior manager of the Company) may at its discretion grant a shorter Vesting Period to an Employee Participant in the following circumstances:

(a) grants of “make-whole” Award(s) to new joiners to replace the share awards they forfeited when leaving the previous employers;
(b) grants to an Employee Participant whose employment is terminated due to death or occurrence of any out of control event;
(c) grants that are made in batches during a year for administrative and compliance reasons, which include Awards that should have been granted earlier if not for such administrative or compliance reasons but had to wait for subsequent batch. In such case, the Vesting Period may be shorter to reflect the time from which the Award would have been granted;
(d) grants of Awards with a mixed or accelerated vesting schedule such as where the Awards may vest evenly over a period of twelve (12) months; or
(e) grants with performance-based vesting conditions in lieu of time-based vesting criteria.
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8. MAXIMUM NUMBER OF SHARES AVAILABLE FOR ISSUE

(a) Subject to the Listing Rules, the Company shall not make any further grant of Award which will result in the aggregate number of Shares underlying all grants made pursuant to the Scheme together with Options and Awards which may be granted under the Share Award Scheme the New Share Option Scheme and any other share schemes for the time being of the Company to exceed such number of Shares as equals 10% of the entire issued share capital of the Company as at the Adoption Date without Shareholders’ approval. The Awarded Shares forfeited in accordance with the terms of the Share Award Scheme will not be regarded as utilised for the purpose of calculating the Scheme Limit and the Service Provider Sublimit (as defined below).
(b) Subject to the foregoing paragraph, within the Scheme Limit, the maximum number of Shares which may be issued in respect of all Awarded Shares which may be granted at any time under the Share Award Scheme together with options and awards which may be granted under any other share schemes for the time being of the Company to Service Providers shall not exceed such number of Shares as equals to 1% of the issued share capital of the Company as at the Adoption Date (the “ Service Provider Sublimit ”).
(c) The Company may seek approval by the Shareholders in general meeting to refresh the Scheme Limit and/or the Service Provider Sublimit under the Share Award Scheme after three (3) years from the Adoption Date (or the date of Shareholders’ approval for the last refreshment). However, the total number of Shares which may be issued upon exercise of all Options and Awards to be granted under the Share Award Scheme the New Share Option Scheme and any other schemes of the Company under the limit as “refreshed” must not exceed 10% of the relevant class of Shares in issue as at the date of approval of the refreshed Scheme Limit and/or the Service Provider Sublimit. For the purpose of seeking approval of the Shareholders, the Company must send a circular to its Shareholders containing the information required under the Listing Rules. Any refreshment of the Scheme Limit and/or the Service Provider Sublimit to be made within three (3) years from the Adoption Date (or the date of Shareholders’ approval for the last refreshment) shall be subject to independent Shareholders’ approval pursuant to Rule 23.03C(1) of the Listing Rules.
(d) The Company may seek separate approval by the Shareholders in general meeting for granting Awards beyond the Scheme Limit provided that the Awarded Shares in excess of the Scheme Limit are granted only to Eligible Award Participants specifically identified by the Company before such approval is sought. For the purpose of seeking approval of the Shareholders under this paragraph, the Company must send a circular to the Shareholders containing a generic description of the specified Eligible Award Participants who may be granted such Awards, the number and terms of the Awarded Shares to be granted, the purpose of granting Awards to the specified Eligible Award Participants with an explanation as to how the terms of the Awards serve such purpose, and the information as required under the Listing Rules. The number and terms of the Awards to be granted to such Eligible Award Participant must be fixed before Shareholders’ approval.
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PRINCIPAL TERMS OF THE SHARE AWARD SCHEME

(e) Where any grant of Awards to an Eligible Award Participant would result in the Awarded Shares transferred and to be transferred or allotted and issued and to be allotted and issued in respect of all options and awards granted to such Eligible Award Participant (excluding any options and awards lapsed in accordance with the terms of the relevant schemes) in the twelve (12)-month period up to and including the date of such grant representing in aggregate over 1% of the Shares in issue, such grant must be separately approved by the Shareholders in general meeting with such Eligible Award Participant and his/her close associates (or associates if the Eligible Award Participant is a connected person) abstaining from voting. The Company must send a circular to the Shareholders, which must disclose the identity of the Eligible Award Participant, the number and terms of the Awards to be granted (and awards and options previously granted to such Eligible Award Participant in such twelve (12)-month period), the purpose of granting Awards to the Eligible Award Participant, an explanation as to how the terms of the Awards serve such purpose and such information as may be required by the Stock Exchange from time to time. The number and terms of Awards to be granted to such Eligible Award Participant must be fixed before Shareholders’ approval.

9. GRANT OF AWARD TO A DIRECTOR, CHIEF EXECUTIVE OR SUBSTANTIAL SHAREHOLDER OF THE COMPANY OR ANY OF THEIR ASSOCIATES

Any grant of Awards to any of the Directors, chief executive of the Company or substantial Shareholder(s) (as defined in the Listing Rules), or any of their respective associates must be approved by the independent non-executive Directors (excluding any independent non-executive Director who is the proposed Grantee of the Award (if any)).

Where any grant of Awards to an independent non-executive Director or a substantial Shareholder or any of their respective associates would result in the Shares transferred and to be transferred or allotted and issued and to be allotted and issued in respect of all options and awards granted (excluding any options and awards lapsed in accordance with the terms of the relevant schemes) to such person in the twelve (12)-month period up to and including the date of such grant representing in aggregate over 0.1% of the Shares in issue, such further grant of Awards must be approved by the Shareholders in a general meeting of the Company in the manner set out below.

The Company must send a circular to the Shareholders. The Grantee, his/her associates and all core connected persons of the Company must abstain from voting in favour of the proposed grant at such general meeting. Parties that are required to abstain from voting in favour at the general meeting pursuant to Rule 23.04(1) of the Listing Rules may vote against the resolution at the general meeting of the Company, provided that their intention to do so has been stated in the relevant circular to the Shareholders. Any vote taken at the general meeting to approve the grant of such Awards must be taken on a poll and comply with the requirements under the Listing Rules. The circular must contain:

(a) details of the number and terms of the Awards to be granted to each Eligible Award Participant, which must be fixed before the Shareholders’ meeting;
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APPENDIX I

(b) the views of the independent non-executive Directors (excluding any independent nonexecutive Director who is the proposed Grantee) as to whether the terms of the grant are fair and reasonable and whether such grant is in the interests of the Company and the Shareholders as a whole, and their recommendation to the independent Shareholders as to voting; and
(c) the information as may be required by the Stock Exchange from time to time.

Shareholders’ approval as required above is also required for any change in the terms of Awards granted to an Eligible Award Participant who is a substantial Shareholder (as defined in the Listing Rules) or an independent non-executive Director, or any of their respective associates.

10. TIMING OF AWARDS

No Award shall be made or vested to Selected Participants pursuant to the Share Award Scheme Rules and no directions or recommendation shall be given to the Trustee with respect to granting or vesting of an Award or any acquisition, receipt or disposal of or dealing in Shares under the Share Award Scheme after inside information has come to the knowledge of the Company until (and including) the trading day after it has been announced pursuant to the requirements of the GEM Listing Rules. In particular, during the period commencing one (1) month immediately preceding the earlier of:

(i) the date of Board meeting (as such date is first notified to the Stock Exchange under the GEM Listing Rules) for the approval of the Company's results for any year, half-year, quarterly or any other interim period (whether or not required under the GEM Listing Rules); and
(ii) the deadline for the Company to announce its results for any year, half-year, quarterly or any other interim period (whether or not required under the GEM Listing Rules),

and ending on the date of the results announcement, and for the avoidance of doubt, no Awards may be made during any period of delay in publishing a results announcement; and in any circumstances which are prohibited under the Listing Rules or where the requisite approval from any applicable regulatory authorities has not been granted.

For the avoidance of doubt, in compliance with the GEM Listing Rules, a Director must not deal in any securities of the Company (and no Awards may be granted to a Director) on any day on which its financial results are published and:

(i) during the period of 60 days immediately preceding the publication date of the annual results or, if shorter, the period from the end of the relevant financial year up to the publication date of the results; and
(ii) during the period of 30 days immediately preceding the publication date of the quarterly results and half-year results or, if shorter, the period from the end of the relevant quarterly or halfyear period up to the publication date of the results,
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unless the circumstances are exceptional, for example, where a pressing financial commitment has to be met as described in Rule 5.67 of the GEM Listing Rules.

11. TRANSFERABILITY AND OTHER RIGHTS TO AWARDED SHARES

Any Award granted hereunder but not yet vested shall be personal to the Selected Participant to whom it is made and shall not be assignable or transferable, and no Selected Participant shall in any way sell, transfer, charge, mortgage, encumber or create any interest in favor of any other person over or in relation to any Award, or enter into any agreement to do so.

The Stock Exchange may consider granting a waiver to allow a transfer to a vehicle (such as a trust or a private company) for the benefit of the participant and any family members of such participant (e.g. for estate planning or tax planning purposes) that would continue to meet the purpose of the Share Award Scheme and comply with Chapter 23 of the GEM Listing Rules. Where such waiver is granted, the Stock Exchange shall require the Company to disclose the beneficiaries of the trust or the ultimate beneficial owners of the transferee vehicle.

For the avoidance of doubt, the Awards do not carry any right to vote at general meetings of the Company, or any dividend, transfer or other rights (including those arising on a liquidation of the Company). No Grantee shall enjoy any of the rights of a Shareholder by virtue of the grant of an Award under the Share Award Scheme, unless and until the Shares underlying the Award are actually allotted and issued or transferred (as the case may be) to the Grantee pursuant to the vesting or exercise of such Award.

Subject to the foregoing, the Shares to be allotted and issued or transferred upon the vesting or exercise of the Awards shall be subject to all the provisions of the Articles of Association for the time being in force and shall rank pari passu in all respects with, and shall have the same voting, dividend, transfer and other rights (including those rights arising on a liquidation of the Company) as the existing fully paid Shares in issue on the date on which those Shares are allotted and issued or transferred pursuant to the vesting or exercise of the Awards and, without prejudice to the generality of the foregoing, shall entitle the holders to participate in all dividends or other distributions paid or made on or after the date on which Shares are allotted and issued, or transferred, other than any dividends or distributions previously declared or recommended or resolved to be paid or made if the record date thereof shall be before the date on which the Shares are allotted and issued or transferred.

12. CESSATION OF EMPLOYMENT AND OTHER EVENTS; CANCELLATION OF AWARDS

(a) If a Selected Participant ceases to be an Eligible Award Participant by reason of retirement of the Selected Participant, any outstanding Awarded Shares not yet vested shall continue to vest in accordance with the Vesting Dates set out in the Award Letter, unless the Board or the committee of the Board or person to which the Board has delegated its authority determines otherwise at their absolute discretion.
(b) If a Selected Participant ceases to be an Eligible Award Participant by reason of (i) his/her employer terminating the contract of employment without notice or payment in lieu of notice, or the Selected Participant having been convicted of any criminal offence involving his/her
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PRINCIPAL TERMS OF THE SHARE AWARD SCHEME

integrity or honesty; (ii) termination of the Selected Participant’s employment or contractual engagement with the Group or an Affiliate by reason of his/her permanent physical or mental disablement; or (iii) termination of the Selected Participant’s employment or contractual engagement with the Group by reason of redundancy, any outstanding Awarded Shares not yet vested shall be immediately forfeited, unless the Board or the committee of the Board or person to which the Board has delegated its authority determines otherwise at their absolute discretion.

(c) In the event of death of a Selected Participant, the Board or the committee of the Board or person to which the Board has delegated its authority shall promptly notify the Trustee in writing as to whether the outstanding Awarded Shares to the deceased Selected Participant or any part thereof shall be deemed to have been vested immediately prior to his death. All outstanding Awarded Shares not deemed to have been so vested shall be deemed forfeited upon the death of the Selected Participant.
(d) In the event of the Grantee who is a Service Provider cease to be an Eligible Award Participant by reason of breach of contract entered into between such Eligible Award Participant and the Group, or termination of his/her/its engagement or appointment, in the absolute determination of the Board or the Board in its sole and absolute opinion believes such Grantee has become a competitor of the Group, or if a Selected Participant is declared bankrupt or becomes insolvent or makes any arrangements or composition with his or her creditors generally, has committed any serious misconduct, or has been convicted of any criminal offence (other than an offence which in the opinion of the Directors does not bring the Grantee or the Group into disrepute), any outstanding Awarded Shares not yet vested shall be immediately forfeited, unless the Board or the committee of the Board or person to which the Board has delegated its authority determines otherwise at their absolute discretion.
(e) If a Selected Participant ceases to be an Eligible Award Participant for reasons other than those set out above, any outstanding Awarded Shares not yet vested shall be immediately forfeited, unless the Board or the committee of the Board or person to which the Board has delegated its authority determines otherwise at their absolute discretion.
(f) Any Award granted but not exercised may not be cancelled except with the written consent of the relevant Grantee and the prior approval of the Directors. Where the Company cancels Awards and makes a new grant to the same Grantee, such new grant may only be made under the Share Award Scheme with available unissued Awards within the limit approved by the Shareholders pursuant to paragraph 8. The Awards cancelled will be regarded as utilised for the purpose of calculating the Scheme Limit and the Service Provider Sublimit.

13. RIGHTS ON CHANGE IN CONTROL

If there is an event of change in control of the Company by way of a merger, a privatisation of the Company by way of a scheme or by way of an offer, the Board or the committee of the Board or person to which the Board has delegated its authority shall at their sole discretion determine whether the Vesting Dates of any Awards will be accelerated. If the Vesting Dates of any Awards are accelerated, the procedures as set out in the Share Award Scheme Rules shall apply except that the

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APPENDIX I

vesting notice will be sent to such Selected Participant affected by this rule as soon as practicable once the proposed Vesting Date is known. The Trustee shall act on the vesting notice in accordance with the Share Award Scheme Rules.

14. RIGHTS ON OPEN OFFER AND RIGHTS ISSUE

In the event the Company undertakes an open offer of new securities in respect of any Shares which are held by the Trustee under the Share Award Scheme, the Trustee shall not subscribe for any new Shares. In the event of a rights issue, the Trustee shall seek instruction from the Company on the steps or actions to be taken in relation to the nil-paid rights allotted to it.

15. RIGHTS ON BONUS WARRANTS

In the event the Company issues bonus warrants in respect of any Shares which are held by the Trustee, the Trustee shall not, unless otherwise instructed by the Company, subscribe for any new Shares by exercising any of the subscription rights attached to the bonus warrants, and shall sell the bonus warrants (provided that there is an open market for such rights) created and granted to it, and the net proceeds of sale of such bonus warrants shall be held as funds of the Trust.

16. RIGHTS ON SCRIP DIVIDEND

In the event the Company undertakes a scrip dividend scheme, the Trustee shall elect to receive the scrip Shares in respect of the Shares held by the Trustee under the Share Award Scheme and such scrip Shares will be treated as related income in respect of the underlying Awarded Shares.

17. RIGHTS ON CONSOLIDATION, SUB-DIVISION, REDUCTION, BONUS ISSUE AND OTHER DISTRIBUTION

In the event the Company undertakes a sub-division or consolidation of the Shares or a reduction of capital, corresponding changes will be made to the number of outstanding Awarded Shares that have been granted, provided that the adjustments shall be made on the basis that the Selected Participant must be given the same proportion of the equity capital, rounded to the nearest whole Share, as that to which that person was previously entitled, and in such manner as the Board determines to be fair and reasonable in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Share Award Scheme for the Selected Participants. However, no such adjustments may be made to the extent that a Share would be issued at less than its nominal value, and the issue of securities of the Company as consideration in a transaction shall not be regarded as a circumstance requiring any such adjustment. All fractional Shares (if any) arising out of such consolidation or sub-division in respect of the Awarded Shares of a Selected Participant shall be deemed as Returned Shares and shall not be transferred to the relevant Selected Participant on the relevant Vesting Date. Save for the case of capitalisation issue, the auditors or independent financial advisers for the time being of the Company must confirm to the Directors in writing that such adjustment(s) satisfy the aforesaid requirements.

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PRINCIPAL TERMS OF THE SHARE AWARD SCHEME

In the event of an issue of Shares by the Company credited as fully paid to the holders of the Shares by way of capitalisation of profits or reserves (including share premium account), the Shares attributable to any Awarded Shares held by the Trustee shall be deemed to be an accretion to such Awarded Shares and shall be held by the Trustee as if they were Awarded Shares purchased by the Trustee hereunder and all the provisions hereof in relation to the original Awarded Shares shall apply to such additional Shares.

In the event of any non-cash distribution or other events not referred to above by reason of which the Board considers an adjustment to an outstanding Award to be fair and reasonable, an adjustment shall be made to the number of outstanding Awarded Shares of each Selected Participant as the Board shall consider to be fair and reasonable in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Share Award Scheme for the Selected Participants. The Company shall provide such funds, or such directions on application of the Returned Shares or other funds in the Trust, as may be required to enable the Trustee to purchase Shares onmarket at the prevailing market price to satisfy the additional Award.

In the event of other non-cash and non-scrip distributions made by the Company not otherwise referred to in the Share Award Scheme Rules in respect of the Shares held upon Trust, the Trustee shall sell such distribution and the net sale proceeds thereof shall be deemed as cash income of the Trust.

Notwithstanding the foregoing, the Board may at its absolute discretion give written directions to the Trustee to deal with such distribution, dividends or other benefits and rights in respect of or in connection with the Awarded Shares.

18. ALTERATION OF THE SHARE AWARD SCHEME

Subject to the Scheme Limit and compliance with the Share Award Scheme Rules, the Share Award Scheme may be altered in any respect by a resolution of the Board or administrator of the Share Award Scheme without the approval of Shareholders in general meeting:

(a) any alterations to the terms and conditions of the Share Award Scheme which are of a material nature or any alterations to the provisions relating to the matters set out in Rule 23.03 of the Listing Rules to the advantage of Eligible Award Participants must be approved by Shareholders in a general meeting;
(b) any change to the terms of awards granted to an Eligible Award Participant must be approved by the Board, the remuneration committee of the Company, the independent non-executive Directors and/or the Shareholders (as the case may be) if the initial grant of the Award was approved by the Board, the remuneration committee of the Company, the independent nonexecutive Directors and/or the Shareholders (as the case may be), except where the alterations take effect automatically under the existing terms of the Share Award Scheme;
(c) any change to the authority of the Directors or the administrator of the Share Award Scheme to alter the terms of the Share Award Scheme must be approved by the Shareholders in a general meeting; and
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APPENDIX I

(d) the amended terms of the Share Award Scheme or the Awards must still comply with the relevant requirements of Chapter 23 of the Listing Rules.

19. TERMINATION OF THE SHARE AWARD SCHEME

The Share Award Scheme shall terminate on the earlier of:

(a) the end of the Award Period, except in respect of any non-vested Awarded Shares granted hereunder prior to the expiration of the Share Award Scheme, for the purpose of giving effect to the vesting of such Awarded Shares or otherwise as may be required in accordance with the provisions of the Share Award Scheme; or
(b) such date of early termination as determined by the Board provided that such termination shall not affect any subsisting rights of any Selected Participants under the Share Award Scheme; provided further that for the avoidance of doubt, the change in the subsisting rights of a Selected Participant in this provision refers solely to any change in the rights in respect of the Awarded Shares already granted to a Selected Participant.

On the Business Day following the vesting, forfeiture or cancellation (as the case may be) of the last outstanding Award made under the Share Award Scheme, the Trustee shall sell all the Shares remaining in the Trust within a reasonable time period as agreed between the Trustee and the Company upon receiving notice of the vesting, forfeiture or cancellation (as the case may be) of such last outstanding Award (or such longer period as the Company may otherwise determine), and remit all cash and net proceeds of such sale referred to in this provision and other funds remaining in the Trust (after making appropriate deductions in respect of all disposal costs, expenses and other existing and future liabilities in accordance with the Trust Deed) to the Company. For the avoidance of doubt, the Trustee shall not transfer any Shares to the Company nor may the Company otherwise hold any interest in Shares whatsoever (other than its interest in the proceeds of the sale of such Shares pursuant to this provision).

20. MISCELLANEOUS

The Share Award Scheme is subject to the provisions of Chapter 23 of the Listing Rules.

Any decision to be made under the Share Award Scheme, including matters of interpretation with respect to or any dispute arising in connection with the Share Award Scheme Rules, shall be made by the Board or the committee of the Board or person to which the Board has delegated its authority. The aforesaid decision shall be final and binding.

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APPENDIX II PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

The following is a summary of the principal terms of the New Share Option Scheme to be approved and adopted by ordinary resolution at the EGM, but such summary does not form part of, nor was it intended to be, part of the New Share Option Scheme, nor should it be taken as affecting the interpretation of the Share Option Scheme Rules:

1. PURPOSE

2. ADMINISTRATION OF THE NEW SHARE OPTION SCHEME

The New Share Option Scheme shall be subject to the administration of the Board whose decision on all matters arising in relation to the New Share Option Scheme or its interpretation or application or effect shall (save as otherwise provided in the New Share Option Scheme and in the absence of manifest error) be final and binding on all persons who may be affected thereby. For the avoidance of doubt, subject to compliance with the requirements of the GEM Listing Rules and the provisions of the New Share Option Scheme, the Board shall have the right to (i) interpret and construe the provisions of the New Share Option Scheme; (ii) determine the persons who will be offered Options under the New Share Option Scheme, and the number of Shares and the subscription price of the Shares, in relation to such Options; (iii) make such appropriate and equitable adjustments to the terms of Options granted under the New Share Option Scheme as it may deem necessary; and (iv) make such other decisions or determinations or regulations as it shall deem appropriate for the administration of the New Share Option Scheme.

3. ELIGIBLE OPTION PARTICIPANTS AND THE BASIS OF ELIGIBILITY OF THE PARTICIPANTS OF THE NEW SHARE OPTION SCHEME

Eligible Option Participants of the New Share Option Scheme include:

(a) Employee Participant(s) including the director(s) and employee(s) (whether full-time or parttime) of any member of the Group (including persons who are granted Options under the New Share Option Scheme as inducement to enter into employment contracts with the Group); and
(b) Service Provider(s) including person(s) who provide services to any members of the Group on a continuing or recurring basis in its ordinary and usual course of business which are in the interests of the long term growth of the Group, which include any independent distributor, contractor, supplier, agent, consultant or adviser to any area of business or business development of the Group, but exclude any placing agent or financial adviser providing advisory services for fundraising, mergers or acquisitions, and other professional services provider such as auditor or valuer,
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APPENDIX II PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

provided that the Board may, from time to time, at its absolute discretion select any Eligible Option Participant to be a Selected Participant.

In determining the basis of eligibility of each Eligible Option Participants, the Board would like into account of (i) the experience of the Eligible Option Participant on the Group’s business; (ii) the length of service of the Eligible Option Participant with the Group (if the Eligible Option Participant is an Employee Participant); (iii) the actual degree of involvement in and/or cooperation with the Group and length of collaborative relationship the Eligible Option Participant has established with the Group (if the Eligible Option Participant is a Service Provider); and (iv) the amount of support, assistance, guidance, advice, efforts and contributions the Eligible Option Participant has exerted and given towards the success of the Group and/or the amount of potential support, assistance, guidance, advice, efforts and contributions the Eligible Option Participant is likely to be able to give or make towards the success of the Group in the future.

For Service Providers, the factors in assessing whether such Service Provider is eligible to participate in the New Share Option Scheme include, in particular: (i) the individual performance of relevant Service Providers; (ii) the length of business relationship with the Group; (iii) the materiality and nature of the business relationship with the Group (such as whether they relate to the core business of the Group and whether such business dealings could be readily replaced by third parties); (iv) track record in the quality of services provided to and/or cooperation with the Group; and (v) the scale of business dealings with the Group with regard to factors such as the actual or expected change in the Group’s revenue or profits which is or may be attributable to the Service Provider.

Further, with respect to the eligibility of each category of the Service Providers, the Board will, on a case by case basis, specifically consider the following factors:

(1) Distributor

Service Providers under this category are mainly distributors who/which support the Group’s business of (i) network support services mainly encompassing network infrastructure design and hardware installation, network management and security services; (ii) network connectivity services that focus on providing intranet and internet connectivity solutions and value-added services; (iii) E-Commerce; and/or (iv) other business(es) that may be carried out by the Group from time to time.

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APPENDIX II PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

Group; (5) the materiality and nature of the business relationship with the Group (such as whether they relate to the core business of the Group and whether such business dealings could be readily replaced by third parties); (6) the background, reputation and track record of the relevant distributor; (7) the replacement cost of such distributor and/or the products or materials (including continuity and stability of distribution of such products or materials); and (8) the potential and/or actual contribution to the business affairs of the Group, in particular, whether such distributor could bring positive impacts to the Group’s business, such as an increase in revenue or profits or a reduction in costs attributable to or brought by the sales of products attributable to the distribution of products by the relevant distributor.

(2) Supplier

(3) Independent contractor, agent, consultant and adviser

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APPENDIX II PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

4. GRANT AND ACCEPTANCE OF OPTIONS

The Board shall, subject to the Share Option Scheme Rules and the GEM Listing Rules, be entitled (but shall not be bound) at any time and from time to time on any Business Day within a period of ten (10) years commencing on the Adoption Date to make an Offer to such Eligible Option Participant as it may in its absolute discretion select, and subject to such conditions as the Board may think fit, to subscribe for such number of Shares (being a board lot for dealing in Shares on the Stock Exchange or an integral multiple thereof) as the Board may, subject to paragraph (7) below, determine the subscription price pursuant to paragraph (6) below, provided that no such grant shall be made if a prospectus is required to be issued under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong) or any applicable laws or if such grant will result in the breach by the Company or the Directors of any applicable securities laws and regulations in any jurisdiction.

An Offer shall be made to Eligible Option Participants in writing (and unless so made shall be invalid) in such form as the Board may from time to time determine either generally or on a case-bycase basis specifying the number of Shares and the Option Period in respect of which the Offer is made and further requiring the Eligible Option Participant to undertake to hold the Option on the terms on which it is to be granted and to be bound by the provisions of the New Share Option Scheme and shall remain open for acceptance by the Eligible Option Participant concerned (and by no other person, including his or her Personal Representative(s) for a period of twenty-one (21) days inclusive of, and from the Offer Date provided that no such Offer shall be open for acceptance after the earlier of the close of business of the Company on the date which falls ten (10) years after the Adoption Date or the termination of the New Share Option Scheme.

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APPENDIX II PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

An Offer shall be deemed to have been accepted by an Eligible Option Participant concerned in respect of all Shares which are offered to such Eligible Option Participant when the duplicate letter comprising acceptance of the Offer duly signed by the Eligible Option Participant with the number of Shares in respect of which the Offer is accepted as stated therein, together with a remittance in favour of the Company of HK$1.00 by way of consideration for the grant thereof is received by the Company.

Any Offer may be accepted by an Eligible Option Participant for any amount of Shares which is less than the number of Shares offered, provided that it is accepted in respect of a board lot for dealing in Shares on the Stock Exchange or an integral multiple thereof.

5. VESTING PERIOD

Save for the circumstances prescribed below, an Option must be held by the Grantee for at least twelve (12) months before the Option can be exercised.

The Board (or the remuneration committee of the Company where it relates to grants of Options to an Employee Participant who is a Director and/or senior manager of the Company) may at its discretion grant a shorter vesting period to an Employee Participant in the following circumstances:

(a) grants of “make-whole” Option(s) to new joiners to replace the share options they forfeited when leaving the previous employers;
(b) grants to an Employee Participant whose employment is terminated due to death or occurrence of any out of control event;
(c) grants that are made in batches during a year for administrative and compliance reasons, which include Options that should have been granted earlier if not for such administrative or compliance reasons but had to wait for subsequent batch. In such case, the vesting period may be shorter to reflect the time from which the Option would have been granted;
(d) grants of Options with a mixed or accelerated vesting schedule such as where the Options may vest evenly over a period of twelve (12) months; or
(e) grants with performance-based vesting conditions in lieu of time-based vesting criteria.

6. EXERCISE OF OPTIONS AND SUBSCRIPTION PRICE OF SHARES

An Option may be exercised in whole or in part by the Grantee giving notice in writing to the Company stating that the Option is thereby exercised and the number of Shares in respect of which it is so exercised. Each of such notice must be accompanied by a remittance for the full amount of the subscription price for the Shares in respect of which the notice is given. Within twenty-eight (28) days after receipt of the notice and the remittance and, where appropriate, receipt of the certificate of the Company’s auditors or independent financial advisers, the Company shall accordingly allot and issue the relevant number of Shares to the Grantee (or, in the event of an exercise of Option by his or

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APPENDIX II PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

her Personal Representative, to the estate of the Grantee) credited as fully paid and instruct the share registrar of the Company to issue to the Grantee (or his or her Personal Representative(s)) a share certificate for the Shares so allotted.

Holders of the Options are not entitled to voting, dividend, transfer and other rights of the holders of the Shares, including those arising on a liquidation of the Company, save as otherwise provided in the New Share Option Scheme or under the relevant laws or the memorandum and articles of association of the Company in effect from time to time.

The subscription price for Shares to be subscribed under the New Share Option Scheme may be determined by the Board at its absolute discretion, provided that it shall not be less than the highest of:

(a) the closing price of the Shares as shown in the daily quotations sheet of the Stock Exchange on the Offer Date, which must be a Business Day;
(b) the average of the closing prices of the Shares as shown in the daily quotations sheets of the Stock Exchange for the five (5) consecutive Business Days immediately preceding the Offer Date; and
(c) the nominal value of the Share on the Offer Date.

Where a relevant Option is to be granted under paragraph (8) or (9), for the purposes of the subparagraph (a) and (b) above, the date of the Board meeting at which the grant was proposed shall be taken to be the Offer Date for such relevant Option, and the provisions as set out above shall apply mutatis mutandis .

7. MAXIMUM NUMBER OF SHARES AVAILABLE FOR ISSUE

(a) Subject to the GEM Listing Rules, the total number of Shares which may be issued in respect of all Options which may be granted at any time under the New Share Option Scheme, all Awards which may be granted at any time under the Share Award Scheme, together with options and awards which may be granted under any other share schemes for the time being of the Company shall not exceed such number of Shares as equals to 10% of the issued share capital of the Company as at the Adoption Date, unless Shareholders’ approval has been obtained pursuant to sub-paragraphs (c) and (d) below. Options lapsed in accordance with the terms of the New Share Option Scheme will not be regarded as utilised for the purpose of calculating the Scheme Limit and the Service Provider Sublimit.
(b) Subject to the limit mentioned in paragraph (7)(a) above, within the Scheme Limit, the total number of Shares which may be issued in respect of all Options which may be granted at any time under the New Share Option Scheme, all Awards which may be granted at any time under the Share Award Scheme, together with options and awards which may be granted under any other share schemes for the time being of the Company to the Service Providers shall not exceed such number of Shares as equals to 1 % of the issued share capital of the Company as at the Adoption Date (i.e. the Service Provider Sublimit).
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APPENDIX II PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

(c) The Company may seek approval of the Shareholders in general meeting to refresh the Scheme Limit and/or the Service Provider Sublimit under the New Share Option Scheme after three (3) years from the Adoption Date (or the date of Shareholders’ approval for the last refreshment), provided that the limit so refreshed must not exceed 10% of the relevant class of Shares in issue as at the date of passing the relevant resolution. The Company must send a circular to the Shareholders containing such information as required under the GEM Listing Rules. Any refreshment of the Scheme Limit and/or the Service Provider Sublimit to be made within three (3) years from the Adoption Date (or the date of Shareholders’ approval for the last refreshment) shall be subject to independent Shareholders’ approval pursuant to Rule 23.03C(1) of the GEM Listing Rules.
(d) The Company may also seek separate approval of the Shareholders in general meeting for granting Options beyond the Scheme Limit provided that the Options in excess of the Scheme Limit are granted only to Eligible Option Participants specifically identified by the Company before such approval is sought. For the purpose of seeking approval of Shareholders under this sub-paragraph (d), the Company must send a circular to the Shareholders containing a generic description of the specified Eligible Option Participants who may be granted such Options, the number and terms of Options to be granted, the purpose of granting Options to the specified Eligible Option Participants with an explanation as to how the terms of the Options serve such purpose and such other information as required under the GEM Listing Rules. The number and terms (including the subscription price) of Options to be granted to such Eligible Option Participant must be fixed before Shareholders’ approval and the date of Board meeting for proposing such grant should be taken as the date of grant for the purpose of calculating the subscription price.

8. GRANT OF OPTIONS TO A DIRECTOR, CHIEF EXECUTIVE OR SUBSTANTIAL SHAREHOLDER OF THE COMPANY OR ANY OF THEIR ASSOCIATES

Any grant of Options to a Director, a chief executive of the Company or substantial Shareholder (as defined under the GEM Listing Rules), or any of their respective associates must be approved by the independent non-executive Directors (excluding any independent non-executive Director who or whose associate is the proposed Grantee of an Option).

Where Options are proposed to be granted to an independent non-executive Director or a substantial Shareholder (as defined in the GEM Listing Rules) or any of their respective associates and if such grant would result in the Shares issued and to be issued in respect of all options and awards granted and to be granted (excluding any options and awards lapsed in accordance with the terms of the relevant schemes) to such person in any twelve (12)-month period up to and including the date of grant representing in aggregate over 0.1% of the total issued Shares, such further grant of Options must be approved by Shareholders in a general meeting of the Company with such Grantee, his/her associates and all core connected persons of the Company abstaining from voting in favour of the proposed grant at such general meeting. Parties that are required to abstain from voting in favour at the general meeting pursuant to Rule 23.04(1) of the GEM Listing Rules may vote against the resolution at the general meeting of the Company, provided that their intention to do so has been

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stated in the relevant circular to the Shareholders. Any vote taken at the general meeting to approve the grant of such Options must be taken on a poll and comply with the requirements under the GEM Listing Rules.

A circular must be prepared by the Company explaining the proposed grant, containing, among other matters, (i) details of the number and terms of the Options to be granted to each Eligible Option Participant, which must be fixed before Shareholders’ approval; (ii) the views of the independent nonexecutive Directors (excluding any independent non-executive Director who and whose associate is a Grantee) as to whether the terms of the grant are fair and reasonable and whether such grant is in the interests of the Company and the Shareholders as a whole, and their recommendation to the independent Shareholders as to voting; and (iii) information as may be required by the Stock Exchange from time to time.

Shareholders’ approval in a general meeting is also required for any change in the terms of Options granted to an Eligible Option Participant who is a substantial Shareholder (as defined in the GEM Listing Rules) or an independent non-executive Director, or any of their respective associates.

9. MAXIMUM ENTITLEMENT OF EACH ELIGIBLE OPTION PARTICIPANT

Where any grant of Options to an Eligible Option Participant would result in the Shares issued and to be issued in respect of all options and awards granted to such Eligible Option Participant (excluding any options and awards lapsed in accordance with the terms of the relevant schemes) in the twelve (12)-month period up to and including the date of such grant representing in aggregate over 1% of the Shares in issue, such grant must be separately approved by the Shareholders in general meeting with such Eligible Option Participant and his/her close associates (or associates if the Eligible Option Participant is a connected person) abstaining from voting. The Company must send a circular to the Shareholders and the circular must disclose the identity of the Eligible Option Participant, the number and terms of the Options to be granted (and options previously granted to such Eligible Option Participant in the twelve (12)-month period), the purpose of granting Options to the Eligible Option Participant, an explanation as to how the terms of the Options serve such purpose and such information as may be required by the Stock Exchange from time to time. The number and terms (including the subscription price) of Options to be granted to such Eligible Option Participant must be fixed before Shareholders’ approval and the date of Board meeting for proposing such further grant should be taken as the date of grant for the purpose of calculating the subscription price.

10. TIME OF EXERCISE OF OPTIONS

Subject to the terms of the New Share Option Scheme, an Option may be exercised in whole or in part at any time during the period to be determined and notified by the Directors to the Grantee thereof at the time of making an Offer provided that such period shall not exceed the period of ten (10) years from the date of the grant of the particular Option but subject to the provisions for early termination of the New Share Option Scheme.

The Board may at its discretion specify any condition in the offer letter at the grant of the relevant Option which must be satisfied before an Option may be exercised. Save as determined by the Board and provided in the offer of the grant of the relevant Option, there is no performance target which

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APPENDIX II PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

must be achieved before an Option can be exercised under the terms of the New Share Option Scheme nor any clawback mechanism for the Company to recover or withhold any Options granted to any Eligible Option Participant.

11. RESTRICTIONS ON THE TIME OF GRANT OF OPTIONS

Grant of Options may not be made:

(a) after inside information (having the meaning defined in the Securities and Futures Ordinance, Chapter 571 of the laws of Hong Kong) has come to the knowledge of the Company until (and including) the trading day after it has been announced pursuant to the requirements of the GEM Listing Rules; and
(b) during the period commencing from one (1) month immediately preceding the earlier of:
(i) the date of the meeting of the Board (as such date is first notified to the Stock Exchange in accordance with the GEM Listing Rules) for approving the Company’s results for any year, half-year or quarter-year period or any other interim period (whether or not required under the GEM Listing Rules); and
(ii) the deadline for the Company to publish its results for any year, half-year or quarteryear period under the GEM Listing Rules, or any other interim period (whether or not required under the GEM Listing Rules),

and ending on the date of the results announcements (or during any period of delay in publishing results announcements).

For the avoidance of doubt, in compliance with the GEM Listing Rules, a Director must not deal in any securities of the Company (and no Options may be granted to a Director) on any day on which its financial results are published and:

(i) during the period of 60 days immediately preceding the publication date of the annual results or, if shorter, the period from the end of the relevant financial year up to the publication date of the results; and
(ii) during the period of 30 days immediately preceding the publication date of the quarterly results and half-year results or, if shorter, the period from the end of the relevant quarterly or halfyear period up to the publication date of the results,

unless the circumstances are exceptional, for example, where a pressing financial commitment has to be met as described in Rule 5.67 of the GEM Listing Rules.

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APPENDIX II PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

12. RIGHTS ARE PERSONAL TO GRANTEES

An Option shall be personal to the Grantee and shall not be assignable and no Grantee shall in any way sell, transfer, charge, mortgage, encumber or create any interest whatsoever in favour of any third party over or in relation to any Option or enter into any agreement so to do. Any breach of the foregoing by a Grantee shall entitle the Company to cancel any Option or any part thereof granted to such Grantee to the extent not already exercised.

13. RIGHTS ON CESSATION OF EMPLOYMENT OR DIRECTORSHIP

If the Grantee of an Option is an employee or a director of the Group and ceases to be an Eligible Option Participant by reason of voluntary resignation or dismissal or upon expiration of his or her term of directorship (unless immediately renewed upon expiration), or by termination of his or her employment or directorship on any one or more of the grounds that he or she has been guilty of persistent or serious misconduct, or has become bankrupt or has become insolvent or has made any arrangement or composition with his or her creditors generally, or has been convicted of any criminal offence (other than an offence which in the opinion of the Directors does not bring the Grantee or the Group into disrepute) or any other ground(s) on which the Group would be entitled to terminate the Grantee’s employment or directorship pursuant to any applicable law before exercising the Option in full, his or her Option (to the extent not already exercised) will lapse on the date of cessation or termination and not be exercisable.

14. RIGHTS ON DEATH

If the Grantee of an Option ceases to be an Eligible Option Participant by reason of his or her death before exercising the Options in full, and where the Grantee is an employee or a director of the Group and none of the events referred to in paragraph (13) above as ground for termination of his or her employment or directorship arises, his or her Personal Representative(s) may exercise the Option (to the extent not already exercised) in whole or in part in accordance with the terms of the New Share Option Scheme within a period of twelve (12) months following the date of death, or up to the expiration of the Option Period, whichever is earlier, failing which it will lapse. If any of the events referred to in paragraphs (18) to (20) below occurs during such period, his or her Personal Representative(s) may exercise the Option pursuant to paragraphs (18) to (20) respectively.

15. RIGHTS ON ILL-HEALTH OR RETIREMENT

If the Grantee of an Option is an employee or a director of the Group ceases to be an Eligible Option Participant by reason of ill-health or retirement as an employee in accordance with his or her contract of employment before exercising the Option in full, he or she may exercise the Option (to the extent not already exercised) in whole or in part in accordance with the terms of the New Share Option Scheme within a period of three (3) months following the date of such cessation, failing which it will lapse. The date of cessation shall be the last day on which the Grantee is actually at work with the Group whether salary is paid in lieu of notice or not. If any of the events referred to in paragraphs (18) to (20) below occurs during such period, he or she may exercise the Option pursuant to paragraphs (18) to (20) respectively.

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APPENDIX II PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

16. RIGHTS ON CESSATION FOR OTHER REASONS

If the Grantee of an Option who is an employee or a director of the Group ceases to be an Eligible Option Participant for any reason other than the reasons set out in paragraphs (13) to (15) above, his or her Option (to the extent not already exercised) will lapse on the date of cessation of his or her employment with the Group.

17. RIGHTS ON BREACH OF CONTRACT

If the Grantee of an Option who is a Service Provider ceases to be an Eligible Option Participant by reason of breach of contract entered into between such Eligible Option Participant and the Group, or termination of his/her/its engagement or appointment, in the absolute determination of the Board or the Board in its sole and absolute opinion believes such Grantee has become a competitor of the Group, or the Grantee has become bankrupt or has become insolvent or has made any arrangement or composition with his/her/its creditors generally, has committed any serious misconduct, or has been convicted of any criminal offence (other than an offence which in the opinion of the Directors does not bring the Grantee or the Group into disrepute), the Options (to the extent not already exercised) shall lapse on the date of the Board’s determination and not be exercisable.

Note: Paragraphs 13, 15 and 16 do not apply to a Grantee who is not an employee or a director of the Group. Unlike employees or directors who are employed or appointed on a continuous basis, the relationship between the Group and the Grantees who are not employees or directors are based on different contracts which may or may not be consecutive or continuous in nature and may be on a project or order basis.

18. RIGHTS ON A GENERAL OFFER

In the event of a general or partial offer, whether by way of take-over offer, share repurchase offer, or scheme of arrangement or otherwise in like manner being made to all Shareholders (or all such holders other than the offeror and/or any person controlled by the offeror and/or any person acting in association or concert (as defined in the Takeovers Code) with the offeror) and such offer becomes or is declared unconditional or such scheme of arrangement is formally proposed to the Shareholders during the Option Period of the relevant Option, the Grantee (or his or her Personal Representative(s)) shall be entitled to exercise the Option in full (to the extent not already exercised) at any time within one (1) month after the date on which such offer becomes or is declared unconditional, or within one (1) month after the record date for entitlements under the scheme of arrangement, as the case may be.

19. RIGHTS ON WINDING UP

In the event a notice is given by the Company to its Shareholders to convene an extraordinary general meeting for the purpose of considering and, if thought fit, approving a resolution to voluntarily windup the Company, the Company shall on the same date as it despatches such notice to each Shareholder give notice thereof to all Grantees and any Grantee or his or her Personal Representative(s) may by notice in writing to the Company accompanied by a remittance for the full amount of the aggregate subscription price in respect of the relevant Option (such notice shall be received by the Company no later than two (2) Business Days prior to the proposed general meeting) exercise the Option (to the extent not already exercised) either to its full extent or to the extent that he

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APPENDIX II PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

or she may specify in his or her notice and the Company shall as soon as possible and in any event no later than the Business Day immediately prior to the date of the proposed general meeting referred to above, allot and issue such number of Shares to the Grantee credited as fully paid.

20. RIGHTS ON RECONSTRUCTION, COMPROMISE OR ARRANGEMENT

If a compromise or arrangement between the Company and the Shareholders or its creditors being proposed for the purpose of or in connection with a scheme for the reconstruction or amalgamation of the Company, the Company shall give notice thereof to all Grantees on the same date as it gives notice of the meeting to the Shareholders or creditors to summon a meeting to consider such a scheme or arrangement and the Options (to the extent not already exercised) shall become exercisable in whole or in part on such date until the earlier of (i) two (2) months after that date or (ii) at any time not later than two (2) Business Days prior to the date of the meeting directed to be convened by the court for the purposes of considering such a scheme or arrangement (the “ Suspension Date ”), accompanied by a remittance of the full amount of the aggregate subscription price for the Shares in respect of which the notice is given exercise the Option (to the extent not already exercised) either to its full extent or to the extent specified in such notice and the Company shall as soon as possible and in any event no later than 3:00p.m. on the Business Day immediately prior to the date of the proposed meeting, allot and issue such number of Shares to the Grantee or his or her Personal Representative(s) which falls to be issued on such exercise of the Option credited as fully paid and register the Grantee as holder thereof. With effect from the Suspension Date, the rights of all Grantees to exercise their respective Options shall forthwith be suspended. Upon such compromise or arrangement becoming effective, all Options shall, to the extent that they have not been exercised, lapse and terminated.

21. CANCELLATION OF OPTIONS

Any Option granted but not exercised may not be cancelled except with the written consent of the relevant Grantee and the prior approval of the Directors. Where the Company cancels Options and makes a new grant to the same Grantee, such new grant may only be made under the New Share Option Scheme with available unissued Options within the limit approved by the Shareholders pursuant to paragraph 7. The Options cancelled will be regarded as utilised for the purpose of calculating the Scheme Limit and the Service Provider Sublimit.

22. EFFECT OF ALTERATIONS TO SHARE CAPITAL

In the event of any alteration in the capital structure of the Company by way of capitalisation issue, rights issue, consolidation, sub-division or reduction of the share capital of the Company (other than an issue of Shares as consideration in respect of a transaction while any Option remains exercisable), such corresponding alterations (if any) will be made in (i) the number or nominal amount of Shares subject to the New Share Option Scheme or any Option so far as such Option remains unexercised; and/or (ii) the subscription price per Share as the auditors or independent financial advisers for the time being of the Company shall at the request of the Company or any Grantee certify in writing to be in their opinion fair and reasonable (other than in the case of capitalisation issue), provided that any such adjustment shall be made on the basis that the Grantee shall have the same proportion of the issued share capital of the Company to which he or she would have been entitled to had he or she exercised all the Options held by him or her immediately prior to such event and the aggregate

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APPENDIX II PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

subscription price payable by the Grantee on the full exercise of any Option shall remain as nearly as possible the same as (but not greater than) it was before such event, but so that no such adjustment shall be made the effect of which would be to enable a Share to be issued at less than its nominal value and the issue of securities of the Company as consideration in a transaction shall not be regarded as a circumstance requiring any such adjustment. Save in the case of capitalisation issue, the auditors or independent financial advisers for the time being of the Company must confirm to the Directors in writing that such adjustment(s) satisfy the aforesaid requirements.

23. RANKING OF SHARES

The Shares to be allotted upon the exercise of an Option will be subject to all the provisions of the Articles of Association for the time being in force and will rank pari passu in all respects with the fully paid Shares in issue on the date on which the Option is duly exercised or, if that date falls on a day when the register of members of the Company is closed, the first day of the re-opening of the register of members (the “ Exercise Date ”) and accordingly will entitle the holders of Shares to participate in all dividends or other distributions paid or made on or after the Exercise Date other than any dividends or other distributions previously declared or recommended or resolved to be paid or made with respect to a record date which shall be before the Exercise Date. A Share allotted upon the exercise of an Option shall not carry voting rights until the name of the Grantee has been duly entered onto the register of members of the Company as the holder thereof.

24. DURATION OF THE NEW SHARE OPTION SCHEME

The New Share Option Scheme shall continue in force for the period commencing from the Adoption Date, and expiring at the close of business on the date which falls ten (10) years after the Adoption Date, after such period no further Options will be granted but the provisions of the New Share Option Scheme shall remain in full force and effect in respect of any Options granted before its expiry or termination but not yet exercised.

25. ALTERATIONS TO THE TERMS OF THE NEW SHARE OPTION SCHEME

Save for the provisions prescribed below, the New Share Option Scheme may be altered in any respect by a resolution of the Board or administrator of the New Share Option Scheme without the approval of Shareholders in general meeting.

(a) The provisions relating to the matters set out in Rule 23.03 of the GEM Listing Rules cannot be altered to the advantage of Eligible Option Participants without the prior approval of Shareholders in a general meeting.
(b) Any alterations to the terms and conditions of the New Share Option Scheme which are of a material nature or any change to the terms of Options granted must be approved by Shareholders, except where the alterations take effect automatically under the existing terms of the New Share Option Scheme.
II-13 -

APPENDIX II PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

(c) Any change to the authority of the Directors or the administrator of the New Share Option Scheme to alter the terms of New Share Option Scheme must be approved by the Shareholders in a general meeting.
(d) The amended terms of the New Share Option Scheme or the Options must still comply with the relevant requirements of Chapter 23 of the GEM Listing Rules.

26. CONDITIONS OF THE NEW SHARE OPTION SCHEME

The New Share Option Scheme is conditional upon:

(a) the GEM Listing Committee of the Stock Exchange granting approval for the listing of and permission to deal in any new Shares which may fall to be allotted and issued by the Company upon the exercise of the Options that may be granted under the New Share Option Scheme; and
(b) the passing of ordinary resolutions at the EGM approving the termination of the Existing Share Option Scheme and the adoption of the New Share Option Scheme.

27. LAPSE OF OPTIONS

An Option shall lapse automatically (to the extent not already exercised) on the earliest of:

(a) the expiry of the Option Period;
(b) the date on which the Grantee commits a breach of paragraph (12);
(c) the expiry of the relevant period or the occurrence of the relevant event referred to in paragraphs (13) to (20); and
(d) the date of the commencement of the winding-up of the Company.

28. TERMINATION

The Company by ordinary resolution in general meeting may at any time terminate the operation of the New Share Option Scheme and in such event no further Options will be offered but in all other respects the provisions of the New Share Option Scheme shall remain in force to the extent necessary to give effect to the exercise of any Options granted but not yet exercised prior thereto or otherwise as may be required in accordance with the provisions of the New Share Option Scheme and Options granted prior to such termination shall continue to be valid and exercisable in accordance with the New Share Option Scheme.

II-14 -

APPENDIX II PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

29. MISCELLANEOUS

The terms of the New Share Option Scheme (and any other schemes adopted by the Company from time to time) shall be in accordance with the requirements set out in Chapter 23 of the GEM Listing Rules. The Company will comply with the relevant statutory requirements and the GEM Listing Rules from time to time in force on a continuing basis in respect of the New Share Option Scheme and any other schemes of the Company. Any dispute arising in connection with the number of Shares of an Option and any of the matters referred to in paragraph (22) above shall be referred to the decision of the Company’s auditors or the independent financial advisers of the Company who shall act as experts and not as arbitrators and whose decision, in the absence of manifest error, shall be final, conclusive and binding on all persons who may be affected thereby.

II-15 -

NOTICE OF EGM

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MICHONG METAVERSE (CHINA) HOLDINGS GROUP LIMITED 米虫元宇宙（中國）控股集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 8645)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “ EGM ”) of Michong Metaverse (China) Holdings Group Limited (the “ Company ”) will be held at Room A3, 7/F, Noble Financial Center, No.1006, Fuzhongsan Road, Futian District, Shenzhen, the PRC on Friday, 14 April 2023 at 10:30 a.m. for the purpose of considering and, if thought fit, passing with or without amendments, the following resolution as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

“ THAT:

(a) conditional upon The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) granting the listing of, and permission to deal, such number of shares of the Company (the “ Shares ”) which may fall to be allotted and issued pursuant to the grant of any awards under the share award scheme (the “ Share Award Scheme ”) proposed to be adopted by the Company, the principal terms of which are set out in the printed document marked “A” now produced to the meeting and for the purpose of identification signed by the Chairman hereof, the rules of the Share Award Scheme be and are hereby approved and adopted to be the share award scheme of the Company; and that the directors of the Company (“ Director(s) ”) be and are hereby authorised to grant awards thereunder and to allot and issue shares pursuant to the Share Award Scheme and take all such steps as may be necessary or desirable to implement the Share Award Scheme;
(b) conditional upon the Stock Exchange granting the listing of, and permission to deal, such number of Shares which may fall to be issued and allotted pursuant to the exercise of any options which may be granted under the new share option scheme of the Company (the “ New Share Option Scheme ”), the principal terms of which are set out in the printed documents marked “B” now produced to the meeting and for the purpose of identification signed by the Chairman hereof, the rules of the New Share Option Scheme be and are hereby approved and adopted to be the new share option scheme of the Company; and that the Directors be and are hereby authorised to grant options to allot, issue and deal in the Shares as maybe required to be allotted and issued upon the exercise of any option granted thereunder and to take all such steps as may be necessary or desirable to implement the New Share Option Scheme;
(c) the total number of Shares which may be awarded by the Company for the purpose of the Share Award Scheme and the New Share Option Scheme pursuant to the resolutions numbered (a) and (b) above, together with any issue of Shares upon exercise of all Awards and Options to be granted under
EGM-1 -

NOTICE OF EGM

the Share Award Scheme, the New Share Option Scheme and any other schemes of the Company (collectively, the ” Share Schemes “), shall not in aggregate exceed 10% of the total number of issued Shares as at the date of the passing of this resolution, and the approvals in paragraphs (a) and (b) above shall be limited accordingly;

(d) conditional upon the New Share Option Scheme becoming effective, the existing share option scheme of the Company as adopted on 11 November 2019 (the “ Existing Share Option Scheme ”) be and is hereby terminated upon the New Share Option Scheme coming into effect (without prejudice to the rights and benefits of and attached to any outstanding options which have been granted under the Existing Share Option Scheme prior to the date hereof (if any)); and
(e) the total number of Shares which may be awarded to all Service Providers pursuant to all share schemes of the Company shall not exceed 1% of the total number of issued Shares as at the date of the passing of this resolution, and the approvals in paragraphs (a) and (b) above shall be limited accordingly.”

By order of the Board Michong Metaverse (China) Holdings Group Limited Yu Decai

Executive Director, Chairman and Chief Executive Officer

Hong Kong, 16 March 2023

As at the date of this notice, the Board comprises Mr. Yu Decai and Mr. Hu Mingdai as Executive Directors and Mr. Chen Youchun, Mr. Ng Der Sian and Ms. Zheng Li Ping as Independent Non-executive Directors.

Notes:

All the resolutions set out in this Notice shall be decided by poll.
Any shareholder of the Company entitled to attend and vote at the meeting is entitled to appoint one, or if he/she/it is a shareholder of more than one Share, more than one proxies to attend and vote instead of him/her/it. A proxy need not be a shareholder of the Company. If more than one proxies is appointed, the number of shares in respect of which each such proxy so appointed must be specified in the relevant form of proxy. Every shareholder present in person or by proxy shall be entitled to one vote for each share held by him/her/it.
In order to be valid, the form of proxy together with the power of attorney or other authority, if any, under which it is signed or a certified copy of that power of attorney or authority, must be deposited at the Company’s branch share registrar and transfer office, Computershare Hong Kong Investor Services Limited, at 17M/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for the meeting (i.e. not later than 10:30 a.m. on Wednesday, 12 April 2023 (Hong Kong time) or the adjourned meeting (as the case may be). Completion and return of the form of proxy shall not preclude a shareholder of the Company from attending and voting in person at the meeting and, in such event, the instrument appointing a proxy shall be deemed to be revoked.
In the case of joint holders of a Share, any one of such joint holders may vote at the meeting, either personally or by proxy, in respect of such Share as if he/she were solely entitled thereto; but if more than one of such joint holders are present at the above meeting personally or by proxy, the one of such joint holders so present whose name stands first on the Register of Members of the Company in respect of such Share shall alone be entitled to vote in respect thereof.
EGM-2 -

NOTICE OF EGM

In the case of an appointment of corporate representative by a corporate shareholder (other than a shareholder which is a Clearing House (as defined in the Company’s articles of association) (or its nominee(s))), a copy of the resolution of its directors or other governing body of the shareholder authorising the appointment of the corporate representative or a form of notice of appointment of corporate representative issued by the Company for such purpose or a copy of the relevant power of attorney, together with an up-to-date copy of the shareholder’s constitutive documents and a list of directors or members of the governing body of the shareholder as at the date of such resolution, or, as the case may be, power of attorney, in each case certified by a director, secretary or a member of the governing body of that shareholder and notarised, must be deposited at the Company’s branch share registrar and transfer office, Computershare Hong Kong Investor Services Limited, at 17M/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for the meeting (i.e. not later than 10:30 a.m. on Wednesday, 12 April 2023) or the adjourned meeting (as the case may be).
For determining the entitlement to attend and vote at the meeting, the Register of Members of the Company will be closed from Tuesday, 11 April 2023 to Friday, 14 April 2023, both dates inclusive, during which period no transfer of shares will be registered. In order to be eligible to attend and vote at the EGM, unregistered holders of shares of the Company shall ensure that all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar and transfer office, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong for registration not later than 4:30 p.m. on Thursday, 6 April 2023.
References to time and dates in this notice are to Hong Kong time and dates.
In case of inconsistency between the Chinese and the English text thereof, the English text shall prevail.
EGM-3 -

AI assistant

Byte Metaverse Holdings Limited — Proxy Solicitation & Information Statement 2023

51517_rns_2023-03-15_9aca3061-6f3d-4ea9-81a3-49676b22930d.pdf

MICHONG METAVERSE (CHINA) HOLDINGS GROUP LIMITED 米虫元宇宙（中國）控股集團有限公司

(1) PROPOSED ADOPTION OF SHARE AWARD SCHEME; (2) TERMINATION OF EXISTING SHARE OPTION SCHEME AND PROPOSED ADOPTION OF THE NEW SHARE OPTION SCHEME; AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

CHARACTERISTICS OF GEM

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

MICHONG METAVERSE (CHINA) HOLDINGS GROUP LIMITED 米虫元宇宙（中國）控股集團有限公司

To the Shareholders

(1) PROPOSED ADOPTION OF SHARE AWARD SCHEME; (2) TERMINATION OF EXISTING SHARE OPTION SCHEME AND PROPOSED ADOPTION OF THE NEW SHARE OPTION SCHEME; AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

1. INTRODUCTION

2. PROPOSED ADOPTION OF SHARE AWARD SCHEME

Purposes and objectives

Vesting period

LETTER FROM THE BOARD

Eligible Award Participants

LETTER FROM THE BOARD

LETTER FROM THE BOARD

LETTER FROM THE BOARD

LETTER FROM THE BOARD

LETTER FROM THE BOARD

Duration

Appointment of Trustee

LETTER FROM THE BOARD

Performance targets

Conditions Precedent

Scheme Limit

3. TERMINATION OF EXISTING SHARE OPTION SCHEME AND PROPOSED ADOPTION OF THE NEW SHARE OPTION SCHEME

Termination of Existing Share Option Scheme

Proposed adoption of the New Share Option Scheme

Purpose

LETTER FROM THE BOARD

Vesting Period

Eligible Option Participants

LETTER FROM THE BOARD

LETTER FROM THE BOARD

LETTER FROM THE BOARD

Duration

Performance targets

LETTER FROM THE BOARD

Conditions precedent of the New Share Option Scheme

Scheme Limit

LETTER FROM THE BOARD

Value of the Options

LETTER FROM THE BOARD

4. GENERAL

5. THE EGM AND PROXY ARRANGEMENT

LETTER FROM THE BOARD

6. RESPONSIBILITY STATEMENT

7. RECOMMENDATIONS

8. DOCUMENT ON DISPLAY

9. COMPETING INTEREST

10. ADDITIONAL INFORMATION

Michong Metaverse (China) Holdings Group Limited Yu Decai

APPENDIX I

PRINCIPAL TERMS OF THE SHARE AWARD SCHEME

1. PURPOSE

2. CONDITIONS

3. DURATION

4. ADMINISTRATION

5. ELIGIBLE AWARD PARTICIPANTS

APPENDIX I

PRINCIPAL TERMS OF THE SHARE AWARD SCHEME

(1) Distributor

(2) Supplier

APPENDIX I

(3) Independent contractor, agent, consultant and adviser

6. GRANT OF AWARDS

APPENDIX I

7. VESTING OF AWARDS

8. MAXIMUM NUMBER OF SHARES AVAILABLE FOR ISSUE

APPENDIX I

PRINCIPAL TERMS OF THE SHARE AWARD SCHEME

Byte Metaverse Holdings Limited Proxy Solicitation & Information Statement 2023