CM Energy Tech Co., Ltd. — Proxy Solicitation & Information Statement 2009

Jul 17, 2009

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 your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other independent professional adviser.

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

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited 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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TSC Offshore Group Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 206)

PROPOSED ADOPTION OF SHARE OPTION SCHEME AND

NOTICE OF EGM

A notice convening the EGM to be held at Unit 910, 9/F, China Merchants Tower, Shun Tak Centre, 200 Connaught Road Central, Hong Kong, on 5 August 2009 at 10:00 a.m. is set out on pages 17 to 18 of this circular. A form of proxy is also enclosed.

Whether or not you intend to attend and vote at the EGM, you are requested to complete and return the enclosed form of proxy to the Company’s principal place of business at Unit 910, 9/F, China Merchants Tower, Shun Tak Centre, 200 Connaught Road Central, Hong Kong in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

20 July 2009

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
APPENDIX – PRINCIPAL TERMS OF THE SHARE OPTION SCHEME. . . . . . . . . . . . . . . .	8
NOTICE OF EXTRAORDINARY GENERAL MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

• “Adoption Date”

the date on which the Share Option Scheme is conditionally adopted by an ordinary resolution of the Shareholders

• “Board” the board of Directors

• “Business Associate” any consultants or advisers (in the areas of legal, technical, financial or corporate managerial) of the Group or any Invested Entity (whether on an employment or contractual or honorary basis or otherwise and whether paid or unpaid); any provider of goods and/or services to the Group or any Invested Entity; any customer of the Group or any Invested Entity; or any holder of securities issued by any member of the Group or any Invested Entity

• “Business Day” any day on which securities are traded on the Stock Exchange

• “Company” TSC Offshore Group Limited, a company incorporated in the Cayman Islands with limited liability and the issued Shares of which are listed on Main Board of the Stock Exchange

• “Director(s)” director(s) of the Company

• “EGM” the extraordinary general meeting of the Company to be convened at Unit 910, 9/F, China Merchants Tower, Shun Tak Centre, 200 Connaught Road Central, Hong Kong on 5 August 2009 at 10:00 a.m., notice of which is set out on pages 17 to 18 of this circular

• “Eligible Person(s)” any Employee, Business Associate and any other person, who at the sole discretion of the Board, has contributed to the Group (the assessment criteria of which are (a) such person’s contribution to the development and performance of the Group; (b) the quality of work performed by such person for the Group; (c) the initiative and commitment of such person in performing his or her duties; (d) the length of service or contribution of such person to the Group); and (e) such other factors as considered to be applicable by the Board

• “Employee” any directors (whether executive or non-executive and whether independent or not) and any employee (whether full time or part time) of the Group

1

DEFINITIONS

“GEM”	the Growth Enterprise Market of the Stock Exchange
“GEM Share Option Schemes”	collectively, the Pre-IPO Share Option Scheme and the Post-IPO
	Share Option Scheme
“Grantee”	any Eligible Person who accepts the Offer in accordance with
	the terms of the Share Option Scheme, or (where the context so
	permits) any person who is entitled, in accordance with the laws
	of succession applicable, to exercise any Option in consequence of
	the death of the original Grantee
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Invested Entity”	any entity in which the Group holds an equity interest
“Latest Practicable Date”	16 July 2009, being the latest practicable date prior to the date of
	this circular for ascertaining certain information contained in this
	circular
“Listing Rules”	The Rules Governing the Listing of Securities on the Stock
	Exchange
“Offer”	an offer for the grant of an Option made in accordance with the
	Share Option Scheme
“Offer Date”	the date on which an Offer is made to an Eligible Person pursuant
	to the Share Option Scheme
“Option”	an option to subscribe for Shares granted pursuant to the Share
	Option Scheme
“Post-IPO Share Option Scheme”	the Post-IPO Share Option Scheme adopted by the Company on 20
	October 2005 and amended from time to time
“PRC”	the People’s Republic of China
“Pre-IPO Share Option Scheme”	the Pre-IPO Share Option Scheme adopted by the Company on 19
	October 2005
“Share(s)”	the ordinary share(s) of HK$0.1 each in the share capital of the
	Company

2

DEFINITIONS

“Share Option Scheme”	the share option scheme proposed to be adopted by the Company
	at the EGM, a summary of the principal terms of which is set out
	in the Appendix to this circular
“Shareholder(s)”	the holder(s) of the Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subscription Price”	the price per Share at which a Grantee may subscribe for Shares
	on the exercise of an Option pursuant to the Share Option Scheme
“Transfer”	the transfer of listing of the Shares from GEM to the Main Board
	pursuant to the Listing Rules which took place on 5 June 2009
“HK$”	Hong Kong dollar(s), the lawful currency of Hong Kong
“%”	per cent.

3

LETTER FROM THE BOARD

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TSC Offshore Group Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 206)

Executive Directors: Mr. Jiang Binghua Mr. Zhang Menggui

Non-executive Directors: Mr. Jiang Longsheng Mr. Brian Chang

Independent non-executive Directors: Mr. Chan Ngai Sang, Kenny Mr. Bian Junjiang Mr. Guan Zhichuan Mr. Robert William Fogal Jr

Registered office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Principal place of business in Hong Kong: Unit 910, 9/F China Merchants Tower Shun Tak Centre 200 Connaught Road Central Hong Kong 20 July 2009

To the Shareholders

Dear Sir or Madam,

PROPOSED ADOPTION OF SHARE OPTION SCHEME AND NOTICE OF EGM

1. INTRODUCTION

The purpose of this circular is to provide you with information with respect to the resolution to be proposed at the EGM for the adoption of the Share Option Scheme and the notice of EGM.

2. PROPOSED ADOPTION OF THE SHARE OPTION SCHEME

As at the Latest Practicable Date, outstanding options that had been granted pursuant to the PreIPO Share Option Scheme and the Post-IPO Share Option Scheme would entitle the holders thereof to subscribe for 7,678,800 Shares and 34,302,000 Shares respectively. The Pre-IPO Share Option Scheme ceased to be effective on 21 November 2005 save for the unexercised portion of the options granted and accepted during its life time. Pursuant to the terms of the Post-IPO Share Option Scheme, the operation of the Post-IPO Share Option Scheme was also conditionally terminated by the Board on 6 May 2009 which became effective upon the Transfer on 5 June 2009. No further options have been offered or granted under

4

LETTER FROM THE BOARD

the Post-IPO Share Option Scheme. All the outstanding options previously granted but unexercised under the GEM Share Option Schemes will remain valid and exercisable in accordance with their terms of issue after the Transfer.

The Board proposes to recommend to Shareholders to approve the adoption of the Share Option Scheme so that Options may be granted to the Eligible Persons pursuant to the terms thereof. The purpose of the Share Option Scheme is to advance the interests of the Company and the Shareholders by enabling the Company to grant Options to attract, retain and reward the Eligible Persons and to provide the Eligible Persons an incentive or reward for their contribution to the Group and by enabling such persons’ contribution to increase profits by encouraging capital accumulation and share ownership. As at the Latest Practicable Date, the Company had not adopted any other share option schemes.

The terms of the Share Option Scheme provide that in granting Options under the Share Option Scheme, the Board may offer to grant any Options subject to such terms and conditions in relation to the minimum period of the Options to be held and/or the performance criteria to be satisfied before such Options can be exercised and/or any other terms as the Board may determine in its absolute discretion. The Board will also determine the Subscription Price in respect of any Option.

A summary of the principal terms of the Share Option Scheme is set out in the Appendix to this circular.

The Directors consider that it is not appropriate to state the value of all Options that can be granted pursuant to the Share Option Scheme as if they had been granted at the Latest Practicable Date. The Directors believe that any statement regarding the value of the Options as at the Latest Practicable Date will not be meaningful to the Shareholders, taking into account the number of variables which are crucial for the calculation of the value of the Options which have not been determined. Such variables include the Subscription Price, option period, any lock-up period, any performance targets set and other relevant variables.

The Share Option Scheme is conditional upon:

• (a) the passing of an ordinary resolution to approve the Share Option Scheme by the Shareholders at the EGM and to authorise the Board to administer the Share Option Scheme, to grant the Options hereunder and to allot, issue and deal with the Shares which fall to be issued by the Company pursuant to the exercise of the Options under the Share Option Scheme; and

• (b) the Listing Committee of the Stock Exchange granting approval for the listing of, and permission to deal in, such number of Shares to be issued by the Company pursuant to the exercise of the Options which may be granted under the Share Option Scheme.

Subject to the obtaining of Shareholders’ approval with respect to the adoption of the Share Option Scheme, the total number of Shares which may be issued upon exercise of all Options to be granted under the Share Option Scheme and any other share option schemes of the Company must not, in aggregate, exceed 10% of the issued share capital of the Company as at the date of approval of the Share Option

5

LETTER FROM THE BOARD

Scheme. The Board shall not grant any Options which would result in the maximum aggregate number of Shares which may be issued upon exercise of all outstanding Options granted but yet to be exercised under the Share Option Scheme and any other share option schemes adopted by the Company which provide for the grant of options to acquire or subscribe for Shares exceeding, in aggregate, 30% of the issued share capital of the Company from time to time. As at the Latest Practicable Date, an aggregate of 41,980,800 Shares remain issuable upon the exercise in full of all the outstanding options previously granted but unexercised under the GEM Share Option Schemes and no Option has been agreed to be granted under the Share Option Scheme.

As at the Latest Practicable Date, there were 562,540,404 Shares in issue. Assuming no Shares will be issued or repurchased from the Latest Practicable Date to the date of the EGM on which the Share Option Scheme is expected to be adopted by the Shareholders, subject to the Share Option Scheme becoming effective, the Company may grant Options under the Share Option Scheme and any other share option schemes of the Company in respect of which up to 56,254,040 Shares, representing approximately 10% of the Shares in issue, may be issued.

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

Copy of the Share Option Scheme will be available for inspection during 10:00 a.m. to 4:00 p.m. (other than on Saturdays, Sundays and public holidays) at the principal place of business of the Company in Hong Kong at Unit 910, 9/F, China Merchants Tower, Shun Tak Centre, 200 Connaught Road Central, Hong Kong from the date of this circular until the date of the EGM.

EGM

A notice of the EGM is set out on pages 17 to 18 of this circular. Pursuant to Rule 13.39(4) of the Listing Rules, any vote of the shareholders at a general meeting must be taken by poll. Therefore, the resolution proposed at the EGM shall be voted by poll.

Whether or not you intend to attend the EGM, you are requested to complete and return the form of proxy accompanying this circular in accordance with the instructions printed thereon not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof. The completion and return of a form of proxy will not preclude you from attending and voting at the EGM or adjournment thereof in person if you so wish.

RECOMMENDATION

The Board (including all the independent non-executive Directors) considers that the adoption of the Share Option Scheme is in the interests of the Company and the Shareholders as a whole. Accordingly, the Board (including all the independent non-executive Directors) recommends the Shareholders to vote in favour of the resolution as set out in the notice of the EGM.

6

LETTER FROM THE BOARD

INTERESTS OF DIRECTORS

As at the Latest Practicable Date, none of the Directors acted as trustees of the Share Option Scheme or had any direct or indirect interest in the trustees (if any) of the Share Option Scheme.

RESPONSIBILITY

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement contained herein misleading.

By order of the Board TSC Offshore Group Limited Jiang Binghua Executive Chairman

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PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX

This Appendix summarises the principal terms of the Share Option Scheme but does not form part of, nor was it intended to be, part of the Share Option Scheme nor should it be taken as effecting the interpretation of the rules of the Share Option Scheme.

1. PURPOSE OF THE SHARE OPTION SCHEME

The purpose of the Share Option Scheme is to advance the interests of the Company and the Shareholders by enabling the Company to grant Options to attract, retain and reward the Eligible Persons and to provide the Eligible Persons an incentive or reward for their contribution to the Group and by enabling such persons’ contribution to increase profits by encouraging capital accumulation and share ownership.

2. PARTICIPANTS OF THE SHARE OPTION SCHEME AND ELIGIBILITY CRITERIA

The Eligible Persons of the Share Option Scheme to whom Options may be granted by the Board shall include:

• (i) any directors (whether executive or non-executive and whether independent or not) and any employee (whether full time or part time) of the Group (collectively “Employee”);

• (ii) any consultants or advisers (in the areas of legal, technical, financial or corporate managerial) of the Group or any Invested Entity (whether on an employment or contractual or honorary basis or otherwise and whether paid or unpaid); any provider of goods and/ or services to the Group or any Invested Entity; any customer of the Group or any Invested Entity; or any holder of securities issued by any member of the Group or any Invested Entity; (collectively “Business Associate”); and

• (iii) any other person,

who at the sole discretion of the Board, has contributed to the Group (the assessment criteria of which are (a) such person’s contribution to the development and performance of the Group; (b) the quality of work performed by such person for the Group; (c) the initiative and commitment of such person in performing his or her duties; (d) the length of service or contribution of such person to the Group); and (e) such other factors as considered to be applicable by the Board.

The Board may in its absolute discretion specify such conditions as it thinks fit when granting an Option to an Eligible Person (including, without limitation, as to any minimum period an Option must have been held or the minimum period of service or relationship with any member of the Group to be achieved before an Option can be exercised (or any part thereof), to the extent of the Option which can be exercised at any material time, or any performance criteria which must be satisfied by the Eligible Person and/or the Company and/or its subsidiaries, before an Option may be exercised), provided that such conditions shall not be inconsistent with any other terms and conditions of the Share Option Scheme and the Listing Rules.

8

PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX

3. LIFE OF THE SHARE OPTION SCHEME

The Company, by resolution in general meeting, or the Board may at any time terminate the operation of the Share Option Scheme and in such event no further Option will be offered or granted but in all other respects the provisions of the Share Option Scheme shall remain in full force and effect and Options granted prior to such termination shall continue to be valid and exercisable in accordance with the Share Option Scheme.

Subject to the aforesaid, the Share Option Scheme shall be valid and effective for a period of ten (10) years commencing from the date of adoption, after which period no further Options will be offered or granted but the provisions of the Share Option Scheme shall remain in full force and effect in all other respects with respect to Options granted during the life of the Share Option Scheme.

4. SUBSCRIPTION PRICE

The Subscription Price in respect of any Option shall, subject to any adjustments made pursuant to the terms of the Share Option Scheme, be a price determined by the Board and notified to each Grantee and shall be at least the highest of:

• (a) the closing price per Share on the Main Board as stated in the Stock Exchange’s daily quotation sheet on the Offer Date;

• (b) the average closing prices per Share on the Main Board as stated in the Stock Exchange’s daily quotation sheets for the five (5) Business Days immediately preceding the Offer Date; or

• (c) the nominal value of the Share.

5. ACCEPTANCE OF OFFERS

An Offer shall remain open for acceptance by the Eligible Person concerned for such period as determined by the Board, being a date not later than ten (10) Business Days after the Offer Date by which the Eligible Person must accept the Offer or be deemed to have declined it, provided that no such Offer shall be open for acceptance after the tenth anniversary of the date of adoption of the Share Option Scheme or after the Share Option Scheme has been terminated in accordance with the provisions of the Share Option Scheme. The amount payable by the Grantee to the Company on acceptance of the Offer is HK$1.00.

6. MAXIMUM NUMBER OF SHARES AVAILABLE FOR SUBSCRIPTION

• (a) The total number of Shares which may be issued upon exercise of all Options to be granted under the Share Option Scheme and any other share option schemes shall not in aggregate exceed 10% of the total number of Shares in issue as at the date of approval of the Share Option Scheme unless the Company obtains a fresh approval from the Shareholders pursuant to paragraph 6(b) below.

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APPENDIX

PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

• (b) The Company may seek approval of Shareholders in general meeting to renew the 10% limit set out in paragraph 6(a) above such that the total number of Shares in respect of which Options may be granted by the Board under the Share Option Scheme and any other share option schemes of the Company in issue shall not exceed 10% of the total number of Shares in issue as at the date of approval of the renewed limit.

• (c) The Company may grant Options to specified participant(s) beyond the 10% limit set out in paragraph 6(a) above provided that the Options granted in excess of such limit are specifically approved by the Shareholders in general meeting and the participants are specifically identified by the Company before such approval is sought. In seeking such approval, a circular must be sent to the Shareholders containing, inter alia, a generic description of the identified Eligible Person(s), the number and terms of the Options to be granted, the purpose of granting Options to the identified Eligible Person(s), and how the terms of these Options serve such purpose in accordance with Chapter 17 of the Listing Rules.

• (d) Notwithstanding the foregoing and subject to the paragraph 7 below, the maximum number of Shares in respect of which Options may be granted under the Share Option Scheme together with any options outstanding and yet to be exercised under the Share Option Scheme and any other share option schemes of the Company in issue shall not exceed 30% (or such higher percentage as may be allowed under the Listing Rules) of the total number of Shares in issue from time to time.

7. MAXIMUM ENTITLEMENT OF EACH ELIGIBLE PERSON

The total number of Shares issued and to be issued upon exercise of the Options granted to each Eligible Person (including both exercised and outstanding Options under the Share Option Scheme) in any 12-month period must not exceed 1 per cent of the issued share capital of the Company. Where any further grant of Options to an Eligible Person would result in excess of such limit shall be subject to the approval of the Shareholders at general meeting with such Eligible Person and his associates abstaining from voting. In seeking such approval, a circular must be sent to the Shareholders disclosing, inter alia, the identity of the identified Eligible Person(s) as well as, the number and terms of the Options to be granted (and options previously granted to such Eligible Person), in accordance with Chapter 17 of the Listing Rules.

8. GRANTS OF OPTIONS TO CERTAIN CONNECTED PERSONS

• (a) Any grant of Options to a Connected Person or any of its associates must be approved by all of the independent non-executive Directors (excluding any independent non-executive Director who is also the Grantee).

• (b) Where Options are proposed to be granted to a substantial Shareholder or an independent non-executive Director or any of their respective associates, and the proposed grant of Options will result in the total number of Shares issued and to be issued upon exercise of all Options already granted and to be granted (including Options exercised, cancelled and outstanding) to such person in the 12-month period up to and including the date of such

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APPENDIX

PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

grant representing in aggregate over 0.1 per cent of the issued share capital of the Company and having an aggregate value, based on the closing price of the Shares at the date of each grant, in excess of HK$5 million, such grant of Options must be subject to the approval of the Shareholders at general meeting. The Connected Person involved in such proposed grant of Options and all other Connected Persons must abstain from voting in such general meeting (except that any Connected Person may vote against the proposed grant provided that his intention to do so has been stated in the relevant circular to the Shareholders). A circular must be sent to the Shareholders explaining the proposed grant of Option, disclosing the number and terms of the Option (including the Subscription Price) proposed to be granted and the recommendation from the independent non-executive Directors (excluding any independent non-executive Director who is the grantee of the Option) as to voting. Any change in the terms of the Options granted to a substantial shareholder or an independent non-executive Director of the Company, or any of their respective associates must also be approved by the Shareholders in general meeting.

9. TIME OF EXERCISE OF OPTION

An Option may be exercised in accordance with the terms of the Share Option Scheme at any time during a period to be notified by the Board to the Grantee which the Board may in its absolute discretion determined, save that such period shall not be more than 10 years from the date of acceptance of the Offer (subject to the provisions for early termination in accordance with the Share Option Scheme) (the “ Option Period ”).

10. RIGHTS ARE PERSONAL TO GRANTEE

An Option shall be personal to the Grantee and shall not be assignable nor transferable, and no Grantee shall in any way sell, transfer, assign, charge, mortgage, encumber or create any interest (legal or beneficial) in favour of any third party over or in relation to any Option or attempt to do so. Any breach of the foregoing shall entitle the Company to cancel any outstanding Option or part thereof granted to such Grantee.

11. RIGHTS ON CEASING EMPLOYMENT

In the case of the Grantee being an employee or a director of the Group leaves the services of the Group by reason other than death or on one or more of the grounds specified in paragraph 16(d), or because his employing company ceases to be a member of the Group, the Grantee may exercise the Option up to his entitlement at the date of cessation (to the extent he is entitled to exercise at the date of cessation but not already exercised) within a period being the earlier of (i) three months (or such other period as the Board may determine) following the date of such cessation, which date shall be the last actual working day with the Group whether salary is paid in lieu of notice or not or the last date of appointment as director of the Group, as the case may be, or (ii) the expiration of the relevant Option Period. Any Options not so exercised shall lapse and determine at the end of the said period provided that in any such case, the Directors in their absolute discretion may otherwise determine subject to such conditions or limitations as the Directors may decide.

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PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX

12. RIGHTS ON DEATH

In the case of the Grantee ceases to be an Eligible Person by reason of death, he or (as the case may be) his personal representatives may exercise all or part of his Options within a period being the earlier of (i) six months after he so ceases to be an Eligible Person or (ii) the expiration of the relevant Option Period. Any Options not so exercised shall lapse and determine at the end of the said period provided that in any such case, the Directors in their absolute discretion may otherwise determine subject to such conditions or limitations as the Directors may decide.

13. RIGHTS ON A GENERAL OFFER

• (a) If, in consequences of any general offer made to the holders of Shares (being an offer made in the first instance on a condition such that, if it is satisfied, the offeror will have control of the Company) or otherwise, any person shall have obtained control (as defined in the Codes on Takeovers and Mergers and Share Repurchase) of the Company, then the Directors shall as soon as practicable thereafter notify every Grantee accordingly and each Grantee shall be entitled to exercise all or any of his Options at any time before the earlier of (i) the expiry of the Option Period, or (ii) the 14th day following the date on which the general offer becomes or is declared unconditional to exercise any Option in whole or in part, and to the extent that it has not been so exercised, any Options shall upon the expiry of such period cease and determine provided that if, during such period, such person becomes entitled to exercise rights of compulsory acquisition of Shares and gives notice in writing to any holders of Shares that he intends to exercise such rights, Options shall be and remain exercisable until the earlier of (i) the expiry of the Option Period or (ii) the 14th day from the date of such notice and, to the extent that any Options which have not been exercised upon the expiry of such period, shall thereupon cease and determine.

• (b) If a general offer by way of a scheme of arrangement is made to all the Shareholders and the Share Option Scheme has been approved by the necessary number of Shareholders at the requisite meetings, the Company shall forthwith notify all the Grantees and any Grantee (or his personal representatives) may thereafter (but before such time as shall be notified by the Company) by notice in writing to the Company exercise the Option to its full extent or to the extent specified in such notice.

14. RIGHTS ON WINDING UP

In the event that a notice is given by the Company to the Shareholders to convene a general meeting for the purposes of considering, and if thought fit, approving a resolution to voluntarily wind-up the Company other than for the purposes of a reconstruction, amalgamation or scheme of arrangement, the Company shall on the same date as or soon after it despatches such notice to each member of the Company give notice thereof to all Grantees (together with a notice of the existence of the provisions of this paragraph) and thereupon, each Grantee (or his personal representatives) shall be entitled to exercise all or any of his Options at any time not later than two (2) Business Days prior to the proposed general meeting of the Company by giving notice in writing to the Company, accompanied by a remittance for the full amount of the aggregate Subscription Price for the Shares in respect of which the notice is given whereupon the Company shall as soon as possible and, in any event, no later than the Business Day

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PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX

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 which falls to be issued on such exercise and register the Grantee as holder thereof in the branch register of members of the Company maintained in Hong Kong.

15. RIGHT ON A COMPROMISE OR SCHEME OF ARRANGEMENT

If a compromise or arrangement between the Company and the Shareholders or creditors is proposed for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company or companies, the Company shall give notice thereof to the Grantee (together with a notice of the existence of the provisions of this paragraph) on the same date or soon after it despatches the notice to each member or creditor of the Company summoning the meeting to consider such a compromise or arrangement, and thereupon the Grantee (or his personal representatives) may by notice in writing to the Company accompanied by the remittance for the aggregate Subscription Price in respect of the number of Option exercised under such notice (such notice to be received by the Company not later than two (2) Business Days prior to the proposed meeting) 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 the Business Day immediately prior to the date of the proposed meeting referred to above, allot and issue such number of Shares credited as fully paid, to the Grantee which falls to be issued on such exercise and register the Grantee as holder thereof in the branch register of members of the Company maintained in Hong Kong.

16. LAPSE OF OPTION

The right to exercise an Option shall lapse automatically (to the extent not already exercised) immediately upon the earliest of:

• (a) subject to paragraphs 11-15, the expiry of the Option Period;

• (b) the expiry of any of the periods referred to in paragraphs 11-13;

• (c) subject to the scheme of arrangement becoming effective, the expiry of the period referred to in paragraph 15;

• (d) in the event that the Grantee is an employee or a director of the Group, the date on which the Grantee ceases to be an Eligible Person by reason of summary dismissal for misconduct or other breach of the terms of his employment or directorship or other contract constituting him an Eligible Person, or appears either to be unable to pay or to have no reasonable prospect of being able to pay his debts or has become insolvent or has made any arrangements or composition with his creditors generally or on which he has been convicted of any criminal offence involving his integrity or honesty or (if so determined by the Board) on any other ground on which an employer or a company would be entitled to terminate his or her employment or directorship at common law or pursuant to any applicable laws or under the Grantee’s service contract with the Company or the relevant subsidiary of the Company. A resolution of the Board or the board of directors of the relevant subsidiary of the

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APPENDIX

PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

Company to the effect that the employment or other relevant contract of a Grantee has or has not been terminated on one or more of the grounds specified in this paragraph 16(d) shall be conclusive and binding on the Grantee;

• (e) the date on which the Grantee ceases to be an Eligible Person by reason of termination of his relationship (whether by appointment or otherwise) with the Group or on any one or more of the following grounds (other than by reason of death or on one or more of the grounds specified in sub-paragraph 16(d)) that he has become unable to pay his debts (within the meaning of the Bankruptcy Ordinance) or has become otherwise insolvent or has made any arrangement or composition with his creditors generally, or arrangement or composition with his creditors generally, or has been convicted of any criminal offence involving his integrity or honesty or (if so determined by the Board) has committed any act which is prejudicial to or not in the interests of the Company or any company in the Group. A resolution of the Board or the board of directors of the relevant subsidiary of the Company to the effect that the relationship with a Grantee (other than an employee or a director of the Group) has or has not been terminated and as to the date of such termination shall be conclusive and binding on the Grantee;

• (f) subject to paragraph 14, the date of the commencement of the winding-up of the Company;

• (g) the date on which the Grantee commits a breach of paragraph 10; or

• (h) the date on which the Option is cancelled by the Board as provided in paragraph 20.

The Company shall owe no liability to any Grantee for the lapse of any Option under this paragraph 16.

17. RANKING OF SHARES

The Shares to be allotted and issued upon the exercise of an Option shall be subject to the memorandum of association and articles of association of the Company and the laws of Cayman Islands for the time being in force and shall rank pari passu in all respects with the fully-paid Shares in issue of the Company as at the date of allotment and will entitle the holders to participate in all dividends or other distributions paid or made on or after the date of allotment other than any dividend or other distribution previously declared or recommended or resolved to be paid or made if the record date therefor shall be on or before the date of allotment and issue, provided always that when the date of exercise of the Option falls on a date upon which the register of members of the Company is closed then the exercise of the Options shall become effective on the first Business Day on which the register of members of the Company is re-opened.

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PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX

18. REORGANISATION OF CAPITAL STRUCTURE

In the event of any alteration to the capital structure of the Company whilst any Option remains exercisable, arising from capitalization of profits or reserves, rights issue, consolidation, re-classification or subdivison of Share or reduction of the share capital of the Company in accordance with the legal requirements or requirements of the Stock Exchange, other than any alteration in the capital structure of the Company as a result of an issue of Shares as consideration in a transaction to which the Company is a party, adjustment (if any) shall be made to:

• (a) the number or nominal amount of Shares subject to the Option so far as unexercised; and/or

• (b) the Subscription Price for the Shares subject to the Option so far as unexercised; and/or

• (c) the Shares to which the Option relates; and/or

• (d) any combination thereof as the auditors or the independent financial adviser to the Company (acting as expert not arbitrator) shall at the request of the Company certify in writing to the Board either generally or as regards any particular Grantee that the adjustments are in compliance with Rule 17.03(13) of the Listing Rules and the notes thereto.

Any such adjustments must give a Grantee the same proportion of the equity capital of the Company as to which that Grantee was previously entitled, and any adjustments so made shall be in compliance with the Listing Rules and such applicable guidance and/or interpretation of the Listing Rules from time to time issued by the Stock Exchange (including, without limitation, the “Supplemental Guidance on Main Board Listing Rule 17.03(13) and the Notice immediately after the Rule” attached to the letter of the Stock Exchange dated 5 September 2005 to all issuers relating to share option scheme) but no such alterations shall be made the effect of which would be to enable a Share to be issued at less than its nominal value. The capacity of the auditors or the independent financial adviser to the Company in this paragraph is that of experts and not of arbitrators and their certification shall, in the absence of manifest error, be final and binding on the Company and the Grantees. The costs of the auditors or the independent financial adviser to the Company shall be borne by the Company. Notice of such adjustment shall be given to the Grantees by the Company.

19. ALTERATION TO THE SHARE OPTION SCHEME AND THE TERMS OF OPTIONS GRANTED UNDER THE SHARE OPTION SCHEME

The Board may from time to time in its absolute discretion waive or amend any terms of the Share Option Scheme at such time and in such manner as it deems desirable to the extent permissible under the provisions of the Listing Rules in relation to the Share Option Scheme and all applicable laws in respect thereof.

For the avoidance of doubt, except with the prior approval of the Shareholders in general meeting (with the Eligible Persons and their associates abstaining from voting), the Board may not amend:

• (a) any of the provisions of the Share Option Scheme relating to matters contained in Rule 17.03 of the Listing Rules to the advantage of the Eligible Persons or Grantees;

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PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX

• (b) any terms and conditions of the Share Option Scheme which are of a material nature or any terms of Options granted except where such alteration take effect automatically under the existing terms of the Share Option Scheme; and

• (c) any provisions on the authority of the Board in relation to any alteration to the terms of the Share Option Scheme.

No such amendments shall be altered to the advantage of Grantees except with the prior approval of the Shareholders in general meeting (with Eligible Persons and their respective associates abstained from voting). No such alterations shall operate to affect adversely the terms of issue of any Option granted or agreed to be granted prior to such alterations except with the consent or sanction in writing of such majority of the Grantees as would be required of the Shareholders under the articles of association for the time being of the Company for a variation of the rights attached to the Shares, provided that this restriction should not apply to any amendment made by the Board at the request of the Stock Exchange or other regulatory body for the purpose of ensuring that the Share Option Scheme complies with, among other applicable laws, the requirements of such exchange or other regulatory body on which the Shares are in the course of being listed or from time to time listed or which may have or exercise regulatory powers or jurisdiction in relation to the Company. Any amended terms of the Share Option Scheme or Options shall still comply with the relevant requirements of Chapter 17 of the Listing Rules (subject to such waiver as may be granted by the Stock Exchange from time to time) and shall automatically take effect on all outstanding Options.

20. CANCELLATION OF OPTIONS GRANTED

The Board may cancel an Option granted but not exercised with the approval of the Grantee of such Option.

21. TERMINATION

The Company, by resolution in general meeting, or the Board may at any time terminate the operation of the Share Option Scheme and in such event no further Option will be offered but in all other respects the provisions of the Share Option Scheme shall remain in full force and effect and Options granted prior to such termination shall continue to be valid and exercisable in accordance with the Share Option Scheme.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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TSC Offshore Group Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 206)

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the “ Meeting ”) of TSC Offshore Group Limited (the “ Company ”) will be held at Hong Kong on 5 August 2009 at 10:00 a.m. Unit 910, 9/F, China Merchants Tower, Shun Tak Centre, 200 Connaught Road Central, Hong Kong for the following purposes:

ORDINARY RESOLUTION

To consider and, if thought fit, to pass with or without amendments, the following resolution as an ordinary resolution of the Company:

1. “ THAT conditional on the Listing Committee of The Stock Exchange of Hong Kong Limited granting the approval of the listing of, and permission to deal in, the shares (the “ Shares ”) of TSC Offshore Group Limited (the “ Company ”) which may fall to be issued pursuant to the share option scheme (a copy of which is produced to the meeting marked “A” and signed by the Chairman of this meeting for the purpose of identification) (the “ Share Option Scheme ”, the principal terms of it are described in the Appendix to the circular dated 20 July 2009 of the Company, a copy of which is produced to the meeting marked “B” and signed by the Chairman of this meeting for the purpose of identification), the Share Option Scheme be and is hereby approved and adopted by the Company and the board of directors of the Company be and is hereby authorized to administer the Share Option Scheme, to grant options and to allot, issue and deal with the Shares pursuant to the exercise of any option granted thereunder and to take such steps and do such acts and to enter into such transactions, arrangements and agreements as may be necessary or expedient in order to give full effect to the Share Option Scheme.”

By order of the Board TSC Offshore Group Limited Jiang Binghua Executive Chairman

Hong Kong, 20 July 2009

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Principal place of business in Hong Kong: Registered Office: Unit 910, 9/F Cricket Square China Merchants Tower Hutchins Drive Shun Tak Centre P.O. Box 2681 200 Connaught Road Central Grand Cayman KY1-1111 Hong Kong Cayman Islands

As of the date of this notice, the Board comprises two executive Directors, namely Mr. Jiang Bing Hua and Mr. Zhang Menggui; two non-executive Directors, namely Mr. Jiang Longsheng and Mr. Brian Chang; and four independent non-executive Directors, namely Mr. Chan Ngai Sang, Kenny, Mr. Bian Junjiang, Mr. Guan Zhichuan and Mr. Robert William Fogal Jr.

Notes:

1. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy can vote on a poll. A proxy need not be a member of the Company.

2. In order to be valid, the form of proxy must be duly completed and signed in accordance with the instructions printed thereon and deposited together with a power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power or authority, at the Company’s principal place of business at Unit 910, 9/F, China Merchants Tower, Shun Tak Centre, 200 Connaught Road Central, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

3. Completion and return of a form of proxy will not preclude a member from attending in person and voting at the above meeting or any adjournment thereof, should he so wish.

4. Pursuant to Rule 13.39(4) of The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, any vote of the shareholders at a general meeting must be taken by poll. Therefore, the resolution proposed at the Meeting shall be voted by poll.

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