Dragon Mining Limited — Proxy Solicitation & Information Statement 2004

Feb 9, 2004

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about this circular or as to the action to be taken, you should consult your stockbroker, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Samson Paper Holdings Limited, you should at once hand this circular and the accompanying 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.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims 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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SAMSON PAPER HOLDINGS LIMITED 森信紙業集團有限公司[*]

(Incorporated in Bermuda with limited liability)

PROPOSALS FOR ADOPTION OF NEW SHARE OPTION SCHEME AND

TERMINATION OF THE EXISTING SHARE OPTION SCHEME

A letter from the board of directors of Samson Paper Holdings Limited (“the Company”) is set out on pages 3 to 5 of this circular. A notice convening a special general meeting of the Company to be held at the Company’s head office, 3/F., Seapower Industrial Centre, 177 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong at 11:30 a.m. on Thursday, 26 February 2004 is set out on pages 13 to 14 of this circular.

Whether or not you intend to attend the meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company Secretary at the Company’s head office, 3/F., Seapower Industrial Centre, 177 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong as soon as possible and, in any event, not less than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjournment thereof should you so wish.

9 February 2004

• For identification purpose only

CONTENTS

	Page
Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1-2
Letter from the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3-5
Appendix – Summary of the principal terms of the Scheme. . . . . . . . . . . . . . . . . . . . . .	6-12
Notice of the SGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13-14

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RESPONSIBILITY STATEMENT

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 herein misleading.

– ii –

DEFINITIONS

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

• “Board”

the board of Directors;

• “Company”

Samson Paper Holdings Limited;

• “Date of Grant” in respect of an Option, the business day on which the grant of an Option is made to (and subject to acceptance by) a Participant;

• “Directors” directors of the Company;

• “Eligible Employee” means any employee (whether full time or part-time employee, including any executive director but not any non-executive director) of the Company, its subsidiaries or Invested Entity;

• “Existing Share Option the share option scheme adopted by the Company on 8 Scheme” November 1995;

• “Grantee”

• a Participant who has been granted and accepted (an) Option(s);

• “Group” at any time the Company and its subsidiaries at that time;

• “HK$”

Hong Kong dollars;

• “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China;

• “Invested Entity”

means any entity in which the Group holds any equity interest;

• “Issued Share Capital”

• the issued ordinary share capital of the Company on the Latest Practicable Date;

• “Latest Practicable Date” 5 February 2004, being the latest practicable date for ascertaining certain information for inclusion in this circular;

• “Listing Rules”

• the Rules Governing the Listing of Securities on the Stock Exchange;

• “Options”

options that may be granted pursuant to the Share Scheme;

• “Participants”

persons eligible to be granted Options under the Share Scheme as specified in paragraph 2 of the appendix on page 6 of this circular;

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DEFINITIONS

“Scheme” the new share option scheme proposed to be approved by the Shareholders at the SGM, a summary of the principal terms of which is set out in the appendix to this circular; “SGM” the special general meeting of the Company to be held on Thursday, 26 February 2004 at 11:30 a.m., the notice of which is set out on page 13 of this circular; “Share(s)” ordinary shares of HK$0.10 each in the capital of the Company; “Shareholders” holders of Shares; “Stock Exchange” The Stock Exchange of Hong Kong Limited.

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LETTER FROM THE BOARD

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SAMSON PAPER HOLDINGS LIMITED 森信紙業集團有限公司[*]

(Incorporated in Bermuda with limited liability)

Executive Directors: Mr SHAM Kit Ying (Chairman) (alias SHAM Kit) Mr LEE Seng Jin (Deputy Chairman) Mr CHOW Wing Yuen Ms SHAM Yee Lan, Peggy Mr LEE Yue Kong, Albert

Independent Non-executive Directors: Mr PANG Wing Kin, Patrick Mr LAU Wang Yip, Eric

Registered office: Cedar House 41 Cedar Avenue Hamilton, HM 12 Bermuda

Head office and principal place of business in Hong Kong: 3rd Floor Seapower Industrial Centre 177 Hoi Bun Road Kwun Tong Kowloon Hong Kong 9 February 2004

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR ADOPTION OF NEW SHARE OPTION SCHEME AND TERMINATION OF EXISTING SHARE OPTION SCHEME

INTRODUCTION

In order to comply with the current requirements of the Listing Rules, the Directors propose that the Existing Share Option Scheme be replaced by the Scheme. The purpose of this circular is to provide you with information concerning the ordinary resolution to be proposed at the SGM to approve (i) the adoption of the Scheme in replacement of the Existing Share Option Scheme; and (ii) the termination of the Existing Share Option Scheme.

TERMINATION OF THE EXISTING SHARE OPTION SCHEME

The Directors note that the Stock Exchange announced certain amendments to Chapter 17 of the Listing Rules which concerns share option schemes. The changes, which came into force on 1 September 2001, allow greater flexibility in the operation of share option schemes, and on

• For identification purpose only

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LETTER FROM THE BOARD

the other hand, place stricter requirements in respect of, among other things, grant of options to Connected Persons, the exercise price of the options and disclosure of information relating to options in annual and interim reports.

In order to comply with the current requirements of the Listing Rules, the Directors propose to adopt the Scheme in replacement of the Existing Share Option Scheme which was adopted on 8 November 1995. As at the Latest Practicable Date, no options had been granted under the Existing Share Option Scheme.

The Directors confirm that they will not exercise their authorities to grant options under the Existing Share Option Scheme between the Latest Practicable Date and the date of the SGM.

DETAILS OF THE SCHEME

The purpose of the Scheme is to provide incentives to Participants to contribute to the Group and to enable the Group to recruit high-calibre employees and attract human resources that are valuable to the Group and any Invested Entity.

The Scheme does not specify a minimum period for which an Option must be held nor a performance target which must be achieved before an Option can be exercised. However, the rules of the Scheme provide that the Board may determine, at its absolute discretion, such minimum period and performance target on the grant of an Option. This may vary on a case by case basis but no such term(s) shall be imposed where the result of which will be to the advantage of the Participants. The basis for determination of the subscription price is also specified in the rules of the Scheme. The Directors consider that the aforesaid criteria and rules will serve to preserve the value of the Company and encourage the Participants to acquire proprietary interests in the Company.

The Directors consider that it is not appropriate to state the value of all Options that can be granted under the Scheme as if they had been granted on the Latest Practicable Date as a number of variables which are crucial for the calculation of that value have not been determined. Such variables include the exercise price, exercise period, any performance targets set and other relevant variables. The Directors believe that any calculation of the value of the Options as at the Latest Practicable Date based on a great number of speculative assumptions would not be meaningful and would be misleading to the Shareholders.

The adoption of the Share Scheme is conditional upon:

• (1) the Shareholders passing an ordinary resolution at the SGM to approve the adoption of the Scheme and the termination of the Existing Share Option Scheme;

• (2) the Listing Committee of the Stock Exchange granting approval of the listing of, and permission to deal in any new Shares which may fall to be allotted and issued upon the exercise of the subscription rights attaching to the Options that may be granted under the Scheme.

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LETTER FROM THE BOARD

If condition (2) above is not satisfied within 2 calendar months after the date of adoption of the Scheme on Thursday, 26 February 2004, the Scheme shall forthwith determine and no person shall be entitled to any rights or benefits or be under any obligations under or in respect of the Scheme and the Existing Share Option Scheme shall continue to operate. A special general meeting for the purpose of condition (1) above, amongst other things, has been convened to be held on Thursday, 26 February 2004.

Based on 429,258,039 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 SGM, the maximum number of Shares that can be issued upon exercise of options that may be granted under the proposed Scheme are 42,925,803 Shares.

An application has been made to the Stock Exchange for approval of the listing of and permission to deal in the Shares that may be issued pursuant to the exercise of the Options that may be granted under the Scheme representing 10% of the issued share capital of the Company at the date of SGM. An announcement will be published by the Company in compliance with the Listing Rules in respect of the outcome of the SGM for the adoption of the Scheme on the business day following the SGM.

ACTION TO BE TAKEN

A form of proxy for use at the SGM is enclosed. Whether or not you intend to attend the SGM, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon and deposit with the Company Secretary at the Company’s head office in Hong Kong as soon as possible and in any event so as to arrive not less than 48 hours before the time fixed for holding the SGM. The return of a form of proxy will not preclude you from attending and voting in person at the SGM if you so wish.

RECOMMENDATION

The Directors believe that the termination of the Existing Share Option Scheme and adoption of the Scheme is in the best interests of the Company and the Shareholders. Accordingly, the Directors recommend all Shareholders to vote in favour of the ordinary resolution at the SGM.

A copy of the Scheme is available for inspection during normal business hours at the principal place of business in Hong Kong of the Company from the date of this circular up to the date of the SGM (both days inclusive).

GENERAL

Your attention is drawn to the appendix of this circular which sets out the summary of the terms of the Scheme.

By order of the Board SAMSON PAPER HOLDINGS LIMITED Sham Kit Ying Chairman

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APPENDIX SUMMARY OF THE PRINCIPAL TERMS OF THE SCHEME

The following is a summary of the terms required to be included in the Scheme as required by the Listing Rules:

1 PURPOSE OF THE SCHEME

The purpose of the Scheme is to provide incentives to Participants to contribute to the Group and to enable the Group to recruit high-calibre employees and attract human resources that are valuable to the Group and any Invested Entity.

2 PARTICIPANTS OF THE SCHEME

All directors (including executive directors, non-executive directors and independent nonexecutive directors) and employees of the Group and suppliers, consultants, advisors, agents, customers, service providers, contractors, any member of or any holder of any securities issued by any member of the Group or any Invested Entity are eligible to participate in the Scheme. Subject to the terms and conditions under the Scheme, the Board may at its absolute discretion grant Options to the Participants.

3 MAXIMUM NUMBER OF SHARES AVAILABLE FOR SUBSCRIPTION

The overall limit on the number of Shares which may be issued upon exercise of all outstanding Options granted and yet to be exercised under the Scheme and any other share option scheme(s) of the Company must not exceed 30% of the number of Shares in issue from time to time (the Overall Limit ). No Options may be granted if such grant will result in the Overall Limit being exceeded. Options lapsed or cancelled in accordance with the terms of the Scheme or any other share option scheme(s) of the Company shall not be counted for the purpose of calculating the Overall Limit.

The number of Shares which may be issued upon exercise of all Options to be granted under the Scheme and any other share option scheme(s) of the Company must not exceed 10% in the nominal amount of the issued share capital of the Company as at the date of adoption of the Schemes. Shares have been duly allotted and issued pursuant to this Scheme and Options which have lapsed in accordance with the terms of the Scheme will not be counted in calculating the 10% limit. However, the Company may refresh this 10% limit with Shareholders’ approval in general meeting with the issue of an appropriate circular to Shareholders provided that each renewal may not exceed 10% of the Shares in issue as at the date of Shareholders’ approval for refreshing the 10% limit. The Company may seek separate approval by Shareholders in general meeting, with the issue of an appropriate circular to Shareholders, for granting options beyond the 10% limit provided the Options in excess of the limit are granted only to the Participants specially identified by the Company before such approval is sought.

4 MAXIMUM ENTITLEMENT OF EACH PARTICIPANTS

Unless approved by Shareholders in the manner as set out in this paragraph, the total number of Shares issued and to be issued upon exercise of the Options, granted to each Participant (including both exercised and unexercised Options) under the Scheme or any other

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APPENDIX SUMMARY OF THE PRINCIPAL TERMS OF THE SCHEME

share option scheme adopted by the Company in any 12 month period must not exceed 1% of the Shares in issue as at the proposed Date of Grant. Any further grant of Options which would result in that number of Shares issued as aforesaid exceeding the said 1% limit shall be subject to prior Shareholders’ approval with the relevant Participant and his associates (as defined in the Listing Rules) abstaining from voting.

5 OPTION PERIOD

• (a) The period within which the Options must be exercised will be specified by the Company at the time of grant. This period must expire no later than 10 years from the relevant Date of Grant (being the business day on which the Board resolves to make an offer of Option to the relevant Grantee).

• (b) If the Grantee is an Eligible Employee and ceases to be an Eligible Employee for any reason other than death or for serious misconduct or other grounds referred to in paragraph 5(d) below before exercising his option in full, the Option (to the extent which has become exercisable and not already exercised) will lapse on the date of cessation and will not be exercisable unless the Board otherwise determines in which event the Grantee may exercise the Option (to the extent not already exercised) in whole or in part within such period as the Board may determine following the date of such cessation, which will be taken to be the last day on which the Grantee was in the employ of the Group or the Invested Entity whether salary is paid in lieu of notice or not.

• (c) If the Grantee is an Eligible Employee and ceases to be an Eligible Employee by reason of his death before exercising the Option in full, his personal representative(s) may exercise the Option (to the extent that the same has become exercisable as at the date of his death and not already exercised) in whole or in part within a period of 12 months, following the date of death or such longer period as the Board may determine.

• (d) If the Grantee is an Eligible Employee and ceases to be an Eligible Employee by reason that he has been guilty of misconduct or has committed an act of bankruptcy or has become insolvent or has made any arrangements 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) on any ground on which an employer would be entitled to terminate his employment at common law or pursuant to any applicable laws or under the Eligible Employee’s service contract with the Company or the relevant Subsidiary or the relevant Invested Entity, his Option will lapse automatically on the date the Eligible Employee ceases to be an Eligible Employee.

• (e) If the Board at its absolute discretion determines that the Grantee of any Option (other than an Eligible Employee) or his associate has committed any breach of any contract entered into between the Grantee or his associate on the one part and the Group or any Invested Entity on the other part or that the Grantee has committed any act of bankruptcy or has become insolvent or is subject to any winding-up, liquidation or analogous proceedings or has made any arrangement or composition

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APPENDIX SUMMARY OF THE PRINCIPAL TERMS OF THE SCHEME

with his creditors generally, the Board shall determine that the outstanding Option granted to the Grantee shall lapse. In such event, his option will lapse automatically and will not in any event be exercisable on or after the date on which the Board has so determined.

• (f) If a general offer (whether by takeover offer, merger, privatisation proposal, by scheme of arrangement between the Company and its members or otherwise in like manner) is made to all the holders of Shares (or all such holders other than the offeror and/or any person controlled by the offeror and/or any person acting in concert with the offeror) and such offer, having been approved in accordance with applicable laws and regulatory requirements, becomes or is declared unconditional, the Grantee (or his legal personal representative(s)) shall be entitled to exercise the Option (to the extent not already exercised) at any time until whichever is the earlier of the date of expiry of the Option Period or the last day of the period of 14 days after the date on which the offer becomes or is declared unconditional, after which the Option shall lapse.

• (g) In the event of an effective resolution being proposed for the voluntary winding-up of the Company during the Option Period, the Grantee may, subject to the provisions of all applicable laws, by notice in writing to the Company at any time no later than two business days prior to the date on which such resolution is passed, exercise his Option (to the extent that the same has become exercisable on the date of such notice and not already exercised) either to its full extent or to the extent specified in such notice in accordance with the provisions of the Scheme. Subject to the above, an Option will lapse automatically (to the extent not exercised) on the date of the commencement of the winding-up of the Company.

• (h) If a compromise or arrangement between the Company and its members or creditors is proposed, the Company shall give notice therefor to all Option holders on the same date as it despatches to each member or creditor of the Company a notice summoning the meeting to consider such a compromise or arrangement, and thereupon each Option holder shall be entitled to exercise all or any of his Options in whole or in part at any time not later than five business days prior to the proposed date of the meeting directed to be convened by the Court for the purposes of considering such compromise or arrangement. With effect from the date of such meeting, the rights of all Option Holders 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 thereupon lapse and determine.

6 GRANT OF OPTIONS TO CONNECTED PERSONS

Each grant of Options to any Director, chief executive or substantial shareholder of the Company, or any of their respective associates (as such term is defined in the Listing Rules) shall be subject to the prior approval of the independent non-executive directors of the Company (excluding any independent non-executive director who is a Grantee of the Option in question). Where any grant of Options to a substantial shareholder or an independent non-

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APPENDIX SUMMARY OF THE PRINCIPAL TERMS OF THE SCHEME

executive director of the Company, or any of their respective associates (as such term is defined in the Listing Rules), would result in the 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 grant:

• (a) representing in aggregate over 0.1% (or such other percentage as may from time to time be specified by the Stock Exchange) of the Shares in issue; and

• (b) having an aggregate value, based on the closing price of the Shares as stated in the daily quotations sheets issued by the Stock Exchange on the date of each grant, in excess of HK$5 million (or such other percentage as may from time to time be specified by the Stock Exchange),

such grant of Options shall be subject to prior approval by the Shareholders. Any vote taken at the meeting to approve the grant of such Options must be taken on a poll. All connected persons (as defined in the Listing Rules) of the Company shall abstain from voting at such general meeting, except that any connected person may vote against the relevant resolution at the general meeting provided that his intention to do so has been stated in the circular to be sent to the Shareholders in connection therewith.

7 PERFORMANCE TARGET AND THE OTHER CONDITIONS

Unless otherwise determined by the Board at its absolute discretion, the Scheme does not require a minimum period for which an Option must be held nor a performance target which must be achieved before an Option can be exercised. In the event that the Board resolves to impose any performance target or minimum period on the grant of an Option which decision may vary on a case by case basis, such terms should be stated in the letter containing the offer to the relevant Participant.

8 PAYMENT ON ACCEPTANCE OF AN OPTION

An Option shall be regarded as having been accepted when the duplicate of the grant letter, comprising acceptance of the Option, duly signed by the Participant 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 within 28 days from the Date of Grant.

9 SUBSCRIPTION PRICE

The Subscription Price shall be determined by the Board and notified to a Participant at the time the grant of the Option is made to (and subject to acceptance by) the Participant and shall not be less than the highest of:

• (a) the closing price of the Shares as stated in the Stock Exchange’s daily quotations sheet on the Date of Grant;

• (b) the average closing price of the Shares as stated in the Stock Exchange’s daily quotations sheets for the five business days immediately preceding the Date of Grant; and

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APPENDIX SUMMARY OF THE PRINCIPAL TERMS OF THE SCHEME

• (c) the nominal value of a Share on the Date of Grant.

10 RIGHTS ATTACHING TO SHARES ALLOTTED

The Shares to be allotted upon the exercise of an Option will be subject to all the provisions of the Bye-laws of the Company and the Companies Act 1981 of Bermuda (as amended) and will rank pari passu with the fully paid Shares in issue on the relevant date of allotment and accordingly will entitle the holders to participate in all dividends or other distributions paid or made on or after the relevant date of allotment, other than any dividend or other distribution previously declared or recommended or resolved to be paid or made with respect to a record date which shall be before the relevant date of allotment.

11 DURATION OF THE SCHEME

The Scheme shall be valid and effective for a period of 10 years commencing on the date of adoption of the Scheme by resolution of the Shareholders.

12 LAPSE OF OPTION

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

• (a) the expiry of the Option Period;

• (b) the expiry of the periods or dates referred to in paragraphs 5(a)-(h) above;

• (c) where the Grantee commits a breach as referred to in paragraph 15 below, the date on which the Board shall exercise the Company’s right to cancel the Option.

13 ADJUSTMENTS RELATING TO REORGANISATION OF CAPITAL STRUCTURE

In the event of any capitalisation issue, rights issue, consolidation, sub-division or reduction of the share capital of the Company whilst an Option remains outstanding in that it is granted and yet to be exercised (and has not lapsed or been cancelled), corresponding adjustments (if any) shall be made in:

• (a) the number of Shares subject to the Scheme;

• (b) the number of Shares subject to outstanding Options;

• (c) the Subscription Price in relation to each outstanding Option; and/or

• (d) the method of exercise of the Options,

provided that any such adjustments shall be made such that the proportion of the issued share capital of the Company to which an Option entitles the Grantee to subscribe after such adjustment must be the same as that to which the Option entitled the Grantee to subscribe immediately before such adjustment, but so that no such adjustment shall be made to the extent

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APPENDIX SUMMARY OF THE PRINCIPAL TERMS OF THE SCHEME

that the effect of such adjustment would be to enable any Share to be issued at less than its nominal value. In respect of any adjustment required referred to in this paragraph, other than any made on a capitalisation issue, an independent financial adviser or the Auditors must also confirm to the Board in writing that the adjustments satisfy the foregoing proviso. The capacity and role of the independent financial adviser or the Auditors pursuant to this paragraph is that of experts and not of arbitrators and their confirmation shall (in the absence of manifest error) be final and binding on the Company and the Grantees.

14 TERMINATION OF THE SCHEME

The Company by resolution passed at a general meeting of its shareholders or at a meeting of the Board may at any time terminate the operation of the Scheme and in such event no further Options will be granted or accepted but the provisions of the Scheme shall remain in force in all other respects. All Options granted and accepted prior to such termination and not then exercised shall continue to be valid and exercisable subject to and in accordance with the Scheme.

15 TRANSFERABILITY OF OPTIONS

An Option shall be personal to the Grantee and shall not be assignable and no Grantee shall in any way sell, transfer, assign, charge, mortgage, encumber or create any interest in favour of any third party over or in relation to any Option.

16 ALTERATION OF THE SCHEME

Those specific provisions of the Scheme which relate to the matters set out in Rule 17.03 of the Listing Rules cannot be altered to the advantage of Participants, and no changes to the authority of the Board in relation to any alteration of the terms shall be made, without the prior approval of Shareholders in general meetings. Any alterations to the terms and conditions of the Scheme which are of a material nature, or any change to the terms of the Options granted, must be approved by the Shareholders in general meeting, except where the alterations take effect automatically under the then existing terms of the Scheme. Any such alternations to the terms of the Scheme or the Options will have to comply with the Listing Rules then applicable.

17 CANCELLATION OF OPTIONS

• (a) The Board may effect the cancellation of any Options granted but not exercised on such terms as may be agreed with the relevant Grantee, as the Board may in its absolute discretion see fit and in a manner that complies with all applicable legal requirements for such cancellation.

• (b) Where the Company cancels any Options granted but not exercised and grants new Options to the same Grantee, such grant of new Options may only be made under the Scheme if there is available unissued Options (excluding the cancelled Options) within each of the 10% limits as referred to in paragraph 3 above.

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APPENDIX SUMMARY OF THE PRINCIPAL TERMS OF THE SCHEME

18 RESTRICTION ON THE TIME OF GRANT OF OPTIONS

A grant of Options may not be made after a price sensitive event has occurred or a price sensitive matter has been the subject of a decision until such price sensitive information has been published in newspapers. In particular, during the period commencing one month immediately preceding the earlier of:

• (a) the date of the Board meeting (as such date is first notified to the Stock Exchange in accordance with paragraph 12 of the listing agreement between the Company and the Stock Exchange) for the approval of the Company’s interim or annual results; and

• (b) the deadline for the Company to publish its interim or annual results announcement under the listing agreement between the Company and the Stock Exchange,

and ending on the date of the results announcement, no Option may be granted.

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NOTICE OF THE SGM

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SAMSON PAPER HOLDINGS LIMITED 森信紙業集團有限公司[*]

(Incorporated in Bermuda with limited liability)

NOTICE is hereby given that a special general meeting of Samson Paper Holdings Limited will be held at 11:30 a.m. on Thursday, 26 February 2004 at the Company’s head office, 3/F., Seapower Industrial Centre, 177 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong for the purpose of considering and, if thought fit, passing (with or without amendments) the following resolution which will be proposed as an ordinary resolution:

ORDINARY RESOLUTION

“ THAT conditional on (a) the shareholders of Samson Paper Holdings Limited approving the share option scheme of the Company in the form produced before this meeting and for the purpose of identification marked “A” and signed by the Chairman of the meeting (“Share Option Scheme”) and (b) the Listing Committee of The Stock Exchange of Hong Kong Limited granting approval of the listing of and permission to deal in the shares to be issued pursuant to the exercise of any options granted under the Share Option Scheme representing 10% of the issued share capital of the Company as at the date of the special general meeting (i) the existing share scheme of the Company adopted on 8 November 1995 be and is hereby terminated and (ii) the Share Option Scheme be and is hereby approved and adopted and that the directors of the Company be and are hereby authorised to grant options and to allot and issue shares pursuant to exercise of any options granted under the Share Option Scheme.”

By order of the Board SAMSON PAPER HOLDINGS LIMITED Lee Yue Kong, Albert Company Secretary

Hong Kong, 9 February 2004

Head office and principal office of business in Hong Kong: 3rd Floor, Seapower Industrial Centre 177 Hoi Bun Road Kwun Tong Kowloon Hong Kong

• For identification purpose only

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NOTICE OF THE SGM

Notes:

• (1) A member entitled to attend and vote at the above special general meeting is entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a member of the Company. In order to be valid, a form of proxy together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority, must be deposited with the Company Secretary at the Company’s head office, 3/F., Seapower Industrial Centre, 177 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong not less than 48 hours before the time appointed for holding the special general meeting or any adjournment thereof (as the case may be).

• (2) A form of proxy of the meeting is enclosed herewith.

• (3) Where there are joint registered holders of any Share, any one of such persons may vote, either in person or by proxy, in respect of such Share as if he were solely entitled thereto; but if more than one of such joint holders be present at any meeting, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register in respect of the joint holding.

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