Far East Horizon Limited - Proxy Solicitation & Information Statement 2014

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 Far East Horizon 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 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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(Incorporated in Hong Kong with limited liability) (Stock code: 3360)

PROPOSED ADOPTION OF SHARE OPTION SCHEME AND NOTICE OF GENERAL MEETING

A notice convening the General Meeting of Far East Horizon Limited to be held at Chief Executive Suite I, 5th Floor, Grand Hyatt Hong Kong, 1 Harbour Road, Hong Kong on Monday, July 7, 2014 at 10:00 a.m. is set out on pages 20 to 21 of this circular. A form of proxy for use at the General Meeting is also enclosed. Such form of proxy is also published on the websites of Hong Kong Exchanges and Clearing Limited (http://www.hkexnews.hk) and the Company (http://www.fehorizon.com).

Whether or not you are able to attend the General Meeting, please complete and sign the enclosed form of proxy in accordance with the instructions printed thereon and return it to the Company’s share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17th Floor, 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 holding of the General Meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude shareholders from attending and voting in person at the General Meeting if they so wish.

June 19, 2014

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		4
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
2.	Proposed Adoption of Share Option Scheme . . . . . . . . . . . . . . . . . . . . . . .	5
3.	Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
4.	General Meeting and Proxy Arrangement. . . . . . . . . . . . . . . . . . . . . . . . . .	8
5.	Voting at the General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
6.	Scheme Rules for Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
7.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Appendix	I − Summary of the Principal Terms of
	the Share Option Scheme . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Notice of	General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20

– i –

DEFINITIONS

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

“Administration Committee”

the committee formed by all the members of the remuneration and nomination committee of the Board and two executive Directors, which has been authorized by the Board to operate, manage and administer, among other things, the Share Option Scheme;

“Adoption Date”

the date on which the adoption of the Share Option Scheme is approved by the Shareholders;

“Articles of Association”
the articles of association of the Company currently in force;
“Associate”
has the meaning ascribed to it under the Listing Rules;
“Auditors” the auditors of the Company for the time being;
“Board”
the board of Directors;
“China” or “the PRC”

the People’s Republic of China excluding, for the purpose of this circular, Hong Kong, the Macau Special Administration Region of the PRC and Taiwan;

“Company”
Far East Horizon Limited, a company incorporated in Hong Kong with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange;
“Companies Ordinance”
the new Companies Ordinance (Chapter 622 of the laws of Hong Kong), which has replaced the old Companies Ordinance (Chapter 32 of the laws of Hong Kong) with effect from 3 March 2014;
“Connected Person”
has the meaning ascribed thereto under the Listing Rules;
“Director(s)” the director(s) of the Company;
“Employee”
an employee of the Company or any Subsidiary;
“Exercise Price”
the price per Share at which a Grantee may subscribe for Shares on the exercise of an Option;

– 1 –

DEFINITIONS

“General Meeting” or “GM” a general meeting of the Company to be held at Chief Executive Suite I, 5th Floor, Grand Hyatt Hong Kong, 1 Harbour Road, Hong Kong on Monday, July 7, 2014 at 10:00 a.m., to consider and, if appropriate, to approve the resolution contained in the notice of the meeting which is set out on pages 20 to 21 of this circular, or any adjournment thereof;

“Grantee(s)”
any Selected Participant(s) who accepts an Offer in accordance with the terms of the Share Option Scheme or (where the context so permits) his personal representative;
“Group” the Company and its Subsidiaries;
“HK$”
Hong Kong dollars, the lawful currency of Hong Kong;
“Hong Kong”
the Hong Kong Special Administrative Region of the People’s Republic of China;
“Latest Practicable Date” June 17, 2014, being the latest practicable date prior to the printing of this circular;
“Listing Committee” the listing sub-committee of the board of directors of the Hong Kong Stock Exchange;
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange;
“Main Board” the stock exchange (excluding the option market) operated by the Stock Exchange which is independent from and operates in parallel with the Growth Enterprise Market of the Hong Kong Stock Exchange;
“Offer”
an offer for the grant of an Option;
“Offer Date”
the date, which must be a Business Day, on which an Offer is made to an Selected Participant;
“Option(s)”
option(s) to subscribe for the Shares granted pursuant to the Share Option Scheme from time to time;

– 2 –

DEFINITIONS

“Option Period”
in respect of any particular Option, a period (which may not be later than 10 years from the Offer Date of that Option) to be determined and notified by the Board or the Administration Committee to the Grantee thereof and, in the absence of such determination, from the Offer Date to the earlier of (i) the date on which such Option lapses; and (ii) 10 years from the Offer Date of that Option;
“Option Scheme Rules” rules of the Share Option Scheme;
“Participant” any individual being a senior or middle management personnel, or key Employees of the Company or any Subsidiary;
“Selected Participant”
any Participant selected by the Board or the Administration Committee in accordance with the terms of and entitled to receive a grant under this Scheme;
“Share(s)”
ordinary share(s) in the issued capital of the Company or if there has been a subsequent sub-division, consolidation, reclassification or reconstruction of the share capital of the Company, shares forming part of the ordinary equity share capital of the Company;
“Shareholder(s)”
holder(s) of Share(s);
“Share Option Scheme”
the share option scheme proposed to be adopted by the Company at the GM, a summary of the principal terms of which is set out in the Appendix I to this circular;
“Stock Exchange”
The Stock Exchange of Hong Kong Limited;
“Substantial Shareholder”
has the meaning ascribed to it under the Listing Rules;
“Subsidiary(ies)”
the companies which are for the time being and from time to time the subsidiary(ies) (within the meaning of the Companies Ordinance (Cap. 622 of the Laws of Hong Kong)) of the Company;
“Vesting Date”
the date or each such date on which the granted Options are to vest; and
“%”
per cent.

– 3 –

LETTER FROM THE BOARD

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(Incorporated in Hong Kong with limited liability) (Stock code: 3360)

Chairman and Non-executive Director:

Mr. Liu Deshu Executive Directors:

Mr. Kong Fanxing ( Chief Executive Officer ) Mr. Wang Mingzhe ( Chief Financial Officer )

Registered Office and Headquarters: 4701 Office Tower Convention Plaza 1 Harbor Road Wanchai Hong Kong

Non-executive Directors:

Mr. Yang Lin Mr. Liu Haifeng David Mr. John Law Mr. Kuo Ming-Jian

Principal Place of Business in the PRC: 35th Floor, Jin Mao Tower 88 Century Avenue Pudong Shanghai The People’s Republic of China

Independent Non-executive Directors:

Mr. Han Xiaojing Mr. Liu Jialin Mr. Cai Cunqiang Mr. Yip Wai Ming

June 19, 2014

To the Shareholders

Dear Sir/Madam,

PROPOSED ADOPTION OF SHARE OPTION SCHEME AND NOTICE OF GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with information regarding the resolution relating to the adoption of the Share Option Scheme to be proposed at the GM to be held at Chief Executive Suite I, 5th Floor, Grand Hyatt Hong Kong, 1 Harbour Road, Hong Kong on Monday, July 7, 2014 at 10:00 a.m.

– 4 –

LETTER FROM THE BOARD

PROPOSED ADOPTION OF SHARE OPTION SCHEME

The Board proposed to adopt the Share Option Scheme, the principal terms of which are set out in the Appendix I to this circular. The Board considered that the Share Option Scheme, which will be valid for 10 years from the date of its adoption, will provide the Company with much flexibility in long term planning of granting of the share options to eligible persons in the future. Unless otherwise determined by the Board or the Administration Committee at its respective discretion, the Options granted to the Grantees will vest at the second, third and fourth anniversary of the Offer Date at an average amount and will not vest in the relevant Grantee in the event that the Grantee fails to satisfy the vesting condition(s) as specified in the Offer issued by the Board or the Administration Committee pursuant to the Option Scheme Rules. Unless otherwise determined by the Board or the Administration Committee and stated in the Offer to a Grantee, the Share Option Scheme does not provide for any minimum period for holding of vested Options or any performance target before exercise of vested Options. Under the Share Option Scheme, the Board or the Administration Committee will have absolute discretion in determining the Exercise Price (subject to the Listing Rules) in respect of any Option. The Board is of the view that the flexibility given to the Board or the Administration Committee 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.

Conditions of the adoption of the Share Option Scheme

The Share Option Scheme shall take effect on Adoption Date upon the approval of the Shareholders. Each grant of Options under the Share Option Scheme is subject to the Stock Exchange granting the approval for the listing of, and permission to deal in, any Shares to be issued and allotted by the Company upon the exercise of the Options to be granted under the Share Option Scheme.

Application for Listing

After each grant of Options, an application will be made to the Stock Exchange for the listing of, and permission to deal in, the Shares to be issued and allotted upon the exercise of the Options granted under the Share Option Scheme. Such batch of Options granted or agreed to be granted pursuant to the Share Option Scheme shall be invalid, if the approval and permission from the Stock Exchange referred to above are not granted within 30 days after the Offer Date.

Participants

Senior and middle management personnel, as well as other key Employees of the Company or any Subsidiary are persons eligible to participate in the Share Option Scheme.

The eligibility of the Participant will be decided by the Board or the Administration Committee, at its respective absolute discretion, as to his contribution to the Company or any Subsidiary.

– 5 –

LETTER FROM THE BOARD

Reasons for Adopting the Share Option Scheme

The purpose of the Share Option Scheme is to incentivize and reward the Participants for their contribution to the Company and the Subsidiaries and to align their interests with that of the Company so as to encourage them to work towards enhancing the value of the Company.

Value of the Options

The Board considers that it is not appropriate to state the value of the Options that may be granted pursuant to the Share Option Scheme as if they had been granted at the Latest Practicable Date. The Board believes that any statement regarding the value of the Options as at the Latest Practicable Date will not be meaningful to the Shareholders and to a certain extent would be misleading to the Shareholders, taking into account the number of variables which are crucial for assessing the value of the Options which have not been determined. Such variables include the Exercise Price, the Option Period and all other relevant variables.

Scheme Mandate Limit and Maximum Number of Shares Issuable

As approved by the Board, the total number of new Shares in respect of which Options may be granted under the Share Option Scheme shall not exceed 4% of the Company’s issued share capital as at the date of approval of the Share Option Scheme by the Shareholders at the GM, which is 131,696,000 Shares (the “ Scheme Mandate Limit ”) assuming there is no change to the Company’s issued share capital from the date of this circular to the date of the GM to approve the Share Option Scheme.

The Company, may at any time as the Board thinks fit, seek approval from the Shareholders to refresh the Scheme Mandate Limit; save that the total number of new Shares in respect of which Options may be granted under the Share Option Scheme and any other schemes shall not exceed 10% of the Shares in issue as at the date on which the Shareholders of the Company approve the refreshment of the Scheme Mandate Limit and the maximum number of new Shares in respect of which Options may be granted and yet to be exercised under the Share Option Scheme and any other schemes shall not exceed 30% of the Shares in issue from time to time.

The maximum number of Shares which are issued and may be issued upon exercise of all options (including exercised and outstanding options) granted to any Selected Participant within any 12-month period must not exceed 1% of the issued share capital of the Company from time to time.

Acceptance of an offer of Options

An Offer shall be open for acceptance for such period within 14 days inclusive of, and from, the Offer Date by the Selected Participant. An Offer not accepted within this period shall lapse. An amount of HK$1.00 is payable upon acceptance of the grant of options and such payment shall not be refundable and shall not be deemed to be a part payment of the Exercise Price.

– 6 –

LETTER FROM THE BOARD

Vesting of Options

Unless otherwise determined by the Board or the Administration Committee at its respective discretion, the Options granted to the Grantees will vest at the second, third and fourth anniversary of the Offer Date at an average amount and will not vest in the relevant Grantee in the event that the Grantee fails to satisfy the vesting condition(s) as specified in the Offer issued by the Board or the Administration Committee pursuant to the Option Scheme Rules.

Exercise price

The Exercise Price in respect of any option shall be such price as determined by the Board or the Administration Committee and notified to the Grantees and which shall not be less than the higher of:

(i) the closing price of the Shares on the Stock Exchange as stated in the Stock Exchange’s daily quotations sheet on the Offer Date;
(ii) the average closing price of the Shares on the Stock Exchange as stated in the Stock Exchange’s daily quotations sheets for the five trading days immediately preceding the Offer Date; and

(iii) the nominal value of the Shares as at the Offer Date.

Transferability of Options

Except for the transfer of an Option on the death or permanent disability of a Grantee to his personal representatives pursuant to the Scheme Rules, neither the Option nor any rights in respect of it may be transferred, assigned or otherwise disposed of by any option holder to any other person or entity. If an option holder transfers, assigns or disposes of any such option or rights, whether voluntarily or involuntarily, then the relevant option will immediately lapse.

Compensation Mechanism

Under the Share Option Scheme, if the Board considers that the resignation of a Grantee (no matter whether the resignation is due to (i) the Company’s termination of the relevant Grantee’s employment for cause; (ii) the relevant Grantee’s tender of his resignation; or (iii) the end of the relevant Grantee’s employment contract without renewal) will significantly and adversely affect the Company’s financial, operational or public reputation (including but not limited to the relevant Grantee’s (a) inciting other employees of the Company to resign from the Company or accept employment from other companies or organizations with the same or similar business as that of the Company; (b) revealing the Company’s business secrets to any third party; and (c) spreading false information about the Company), and the relevant Grantee has exercised the Options and received the Shares of the Company, then the Company has the right to require the relevant Grantee to compensate the Company for the damages caused by the aforementioned behaviors.

– 7 –

LETTER FROM THE BOARD

Termination

The Company may by resolution in general meeting or the Board may at any time terminate the Share Option Scheme, upon which no new offers to grant Options under the Share Option Scheme will be made and any options which have been granted within the valid period under the Share Option Scheme but not yet lapsed before the termination of the Share Option Scheme shall remain in force in all other aspects under the Share Option Scheme.

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. 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 in this circular or this circular misleading.

GENERAL MEETING AND PROXY ARRANGEMENT

Notice of the GM is set out on pages 20 to 21 of this circular.

A form of proxy for use at the GM is enclosed with this circular and such form of proxy is also published on the websites of Hong Kong Exchanges and Clearing Limited (http://www.hkexnews.hk) and the Company (http://www.fehorizon.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 share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17th Floor, 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 holding the GM or any adjournment thereof. Completion and delivery of the form of proxy will not preclude you from attending and voting at the General Meeting if you so wish.

VOTING AT THE GENERAL MEETING

Pursuant to the Listing Rules and the Articles of Association, any vote of Shareholders at a general meeting shall be taken by poll except where the chairman in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. An announcement on the poll vote results will be published by the Company after the conclusion of the GM in the manner prescribed under Rule 13.39(5) of the Listing Rules.

– 8 –

LETTER FROM THE BOARD

In respect of the Share Option Scheme, the Company will, where applicable, comply with the relevant requirements under Chapter 17 of the Listing Rules, especially where any related matters are required to be approved by the Shareholders/independent non-executive Directors of the Company separately. As at the Latest Practicable Date, to the best knowledge of the Directors having made all reasonable enquiries, none of the Shareholders has a material interest in the proposed adoption of the Share Option Scheme and therefore, no Shareholder is required to abstain from voting on the said resolution.

SCHEME RULES FOR INSPECTION

The summary of the Share Option Scheme is set out in Appendix I to this circular. A copy of the Share Option Scheme will be available for inspection at 4701 Office Tower, Convention Plaza, 1 Harbor Road, Wanchai, Hong Kong during normal business hours from the date hereof up to and including the date of the General Meeting and will be available for inspection at the General Meeting.

RECOMMENDATION

The Directors consider that the adoption of the Share Option Scheme as set out in the notice the GM is in the best interests of the Company and the Shareholders as a whole. The Directors therefore recommend the Shareholders to vote in favor of the resolution as set out in the notice of the GM.

Yours faithfully, For and on behalf of the Board Far East Horizon Limited Liu Deshu Chairman

– 9 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX I

The following is a summary of the principal terms of the Share Option Scheme to be adopted by the written resolution of the Shareholders at the GM. The terms of the Share Option Scheme comply with the provisions of Chapter 17 of the Listing Rules.

(a) Purpose of the Share Option Scheme

The purpose of the Share Option Scheme is to incentivize and reward the Selected Participants for their contribution to the Company and the Subsidiaries and to align their interests with that of the Company so as to encourage them to work towards enhancing the value of the Company.

(b) Who may join

Senior and middle management personnel, as well as other key Employees of the Company or any Subsidiary are persons eligible to participate in the Share Option Scheme.

The eligibility of the Participant will be decided by the Board or the Administration Committee, at its respective absolute discretion, as to his contribution to the Company or any Subsidiaries.

(c) Maximum number of Shares in respect of which options may be granted

The maximum number of new Shares in respect of which Options may be granted under the Share Option Scheme shall not exceed 4% of the Company’s issued share capital as at the date of approval of the Share Option Scheme by the Shareholders, which is 131,696,000 Shares (the “ Scheme Mandate Limit ”) assuming there is no change to the Company’s issued share capital from the date of this circular to the date of the general meeting to approve the Share Option Scheme, provided that:

(i) the Company may at any time as the Board thinks fit, seek approval from the shareholders to refresh the Scheme Mandate Limit save that the total number of new Shares in respect of which Options may be granted under the Share Option Scheme and any other schemes shall not exceed 10% of the Shares in issue as at the date on which the Shareholders approve the refreshment of the Scheme Mandate Limit. Options previously granted under the Share Option Scheme and any other share option schemes of the Company (including those outstanding, cancelled, lapsed or exercised in accordance with the terms of the Share Option Scheme and other relevant schemes) will not be counted for the purpose of calculating the Scheme Mandate Limit as refreshed. The Company shall deliver to the Shareholders a circular containing such information as required by the Listing Rules;
(ii) the Company may seek separate approvals from the Shareholders in general meetings for granting options which would exceed the Scheme Mandate Limit save that the Company has specified the Participant who would be proposed to be granted Options exceeding the Scheme Mandate Limit and shall deliver to the Shareholders a circular containing such information as required by the Listing Rules; and

– 10 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX I

(iii) the maximum number of new Shares in respect of which Options may be granted and yet to be exercised under the Share Option Scheme and any other schemes shall not exceed 30% of the Shares in issue from time to time.

(d) Maximum entitlement of each individual

The maximum number of Shares which are issued and may be issued upon exercise of all Options (including exercised and outstanding options) granted to any Selected Participant within any 12-month period must not exceed 1% of the issued share capital of the Company from time to time (the “ Individual Limit ”). In the event that any further Options will be granted to such person, which will result in the total number of Shares issued and to be issued under all Options granted or to be granted to him (including exercised, cancelled and outstanding options) within the 12-month period up to and inclusive of the date of such further grant in excess of 1% of the issued share capital of the Company, such grant would be approved by the Shareholders in general meetings and the Participant and his Associates shall abstain from voting. The Company shall deliver to the Shareholders a circular containing the identity of the Selected Participant, the numbers and terms of the options to be granted (and options previously granted to such Participant) and data and detailed information required under the Listing Rules. The number and terms (including the Exercise Price) of the Options to be granted to such Selected Participant must be fixed before the Shareholders’ approval and the date of the Board meeting approving such further grant shall be taken as the date of grant for the purpose of determining the Exercise Price of the Options.

(e) Grant of Options to connected persons

Any grant of Options to a Director, chief executive or Substantial Shareholder of the Company, or any of their respective Associates, under the Share Option Scheme must be approved by the independent non-executive Directors (excluding any independent nonexecutive Director who is the proposed grantee of the Options).

Where any grant of Options to a Substantial Shareholder or an independent non-executive Director of the Company, or any of their respective Associates, will result in the Shares issued and to be issued upon exercise of all options already granted and to be granted under the Share Option Scheme (including options exercised, cancelled and outstanding) to such person in the 12-month period up to and including the date of such grant:

(i) representing in aggregate over 0.1% of the issued share capital as at the date of the abovementioned grant; and
(ii) having an aggregate value, based on the closing price of the Shares on the Stock Exchange as stated in the Stock Exchange’s daily quotation’s sheet at the date of each grant, in excess of HK$5 million,

such further grant of options must be approved by the Shareholders. The Company shall deliver to the shareholders a circular containing data and detailed information required under the Listing Rules.

– 11 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX I

(f) Restriction on the time of grant of Options

The Company may not grant any Options when there is inside information until such inside information has been published in accordance with the Listing Rules. In particular, during the period commencing one month immediately preceding the earlier of:

(i) the date of the Board meeting (as such date is first notified to the Stock Exchange in accordance with the 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 Listing Rules); and
(ii) the deadline for the Company to publish an announcement of its results for any year or half-year under the Listing Rules, or quarterly or any other interim period (whether or not required under the Listing Rules),

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

The Company may not grant any Options within 30 days after it repurchases its own Shares. In addition, the Company may not grant any Options during the period when the relevant Selected Participant is prohibited to deal in the Shares by the Listing Rules or any other relevant laws and regulations.

(g) Restriction on the time of acceptance and exercise of Options

During the period when any Selected Participant is prohibited to deal in the Shares by the Listing Rules or any other relevant laws and regulations, the relevant Selected Participant may not accept the Offer of Options, exercise the vested Options or sell the Shares obtained by exercising the Options. For illustration purpose:

(i) in respect of any Selected Participant, during the period when the relevant Selected Participant is aware of any inside information until such inside information has been published in accordance with the Listing Rules;
(ii) in respect of the Directors or Relevant Employee (as defined in the Listing Rules), on any day on which its financial results are published and: (a) 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 (b) during the period of 30 days immediately preceding the publication date of the quarterly results (if any) and half-year results or, if shorter, the period from the end of the relevant quarterly or half-year period up to the publication date of the results.

(h) Acceptance of an offer of Options

– 12 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX I

(i) Vesting of Options

(j) Vesting conditions

The vesting of the Options is subject to the Company’s fulfillment of the annual performance target for the previous financial year which was set by the Board as budget for the previous financial year.

The vesting of the Options is also subject to the Grantees remaining at all times after the Offer Date and on the Vesting Date (as the case may be, on each relevant Vesting Date) an Employee of the Company or any Subsidiary. For the avoidance of doubt, in the event of a Selected Participant ceasing to be a Participant by reason of death, all Options granted but not vested shall be deemed to lapse immediately on the date of his death.

The Options cannot be vested and will lapse on the Vesting Date if:

(i) the Grantee has received Category C or lower category on the previous annual performance evaluation;
(ii) the employment relationship with the relevant Grantee has been terminated by the Company or any Subsidiary for cause. For the purposes of this paragraph and all other relevant provisions hereunder (if any) relating to termination for cause, cause shall mean:
(a) dishonesty or serious misconduct, whether or not in connection with his employment; willful disobedience or non-compliance with the terms of his employment, agency or consultancy contract with the Company or any Subsidiary or any legitimate orders or instructions given by the Company or any Subsidiary as the case may be;
(b) incompetence or negligence in the performance of his duties in the conclusive opinion of the Company or any Subsidiary;
(c) doing anything in the conclusive opinion of the Company or any Subsidiary adversely affecting his ability to perform his duties properly or bringing the Company or the Group into disrepute; or
(d) leaking the commercial secret or confidential information of the Company or any Subsidiary.

– 13 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX I

(iii) the Grantee has been dismissed by the Company or any Subsidiary, tendered his resignation, the end of the employment contract without renewal or termination of the employment contract by negotiation of the Employee and the Company or any Subsidiary before the expiry of such contract;
(iv) the Grantee has been convicted for any criminal offence involving his integrity or honesty;
(v) the Grantee has become bankrupt or failed to pay his debts within a reasonable time after they become due or has made any arrangement or composition with his creditors generally; or
(vi) the Grantee has been charged, convicted or held liable for any offence under the relevant securities laws in Hong Kong or any other applicable laws or regulations in force from time to time.

For the avoidance of doubt, in the event that a Grantee ceases to be qualified as a Participant by reason of (i) if he is an Employee, redundancy, severance or dismissal or his resignation; and (ii) the company by which such Selected Participant is employed or contracted with ceases to be a Subsidiary; then such person will cease to be a Selected Participant for the purposes of this Scheme. The Options granted but not vested shall automatically lapse forthwith and not be vested on the Vesting Date and no claims shall be brought against the Company.

For the avoidance of doubt, in the event that a Grantee is transferred to the investee company of the Group under the instruction of the Group and still holds position in the Group, the relevant Grantee will still be qualified as a Participant. However, if the relevant Grantee working in the investee company of the Group does no longer hold position in the Group, the relevant Grantee will cease to be qualified as a Participant.

Notwithstanding any other provisions of this Share Option Scheme (but subject to any applicable laws), the Board or the Administration Committee shall be at liberty to waive the vesting conditions referred to herein.

(k) Exercise price

The Exercise Price in respect of any option shall be such price as determined by the Board or the Administration Committee and notified to the relevant Grantee and which shall not be less than the higher of:

(i) the closing price of the Shares on the Stock Exchange as stated in the Stock Exchange’s daily quotations sheet on the Offer Date;
(ii) the average closing price of the Shares on the Stock Exchange as stated in the Stock Exchange’s daily quotations sheets for the five trading days immediately preceding the Offer Date; and

– 14 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX I

(iii) the nominal value of the Shares as at the Offer Date.

(l) Duration of the Share Option Scheme

Subject to any early termination, the Share Option Scheme shall be valid and effective for a period of ten years commencing on the Adoption Date, after which period no further options will be granted but the provisions of the Share Option Scheme shall remain in full force and effect to the extent necessary to give effect to the exercise of any options granted prior thereto which are at that time or become thereafter capable of exercise under the Share Option Scheme.

(m) Time of exercise of Options

The Options shall be exercised within the Option Period and any Option which remains unexercised upon the expiry of the Option Period shall lapse, except that:

(i) in case of the death or permanent disabilities of a relevant Grantee, the relevant Grantee or his legal representative shall exercise the vested Option within 90 days after his death or occurrence of the event resulting his permanent disabilities, unless otherwise determined by the Board or Administration Committee;
(ii) in case of retirement according to the retirement scheme of the Group and not holding any position in the Group, the relevant Grantee shall be able to exercise the Options within the Option Period;
(iii) in case of resignation, failure to renew the employment contract or termination of the employment contract by negotiation between the Employee and the Company before its expiry or for cause which results in the disqualification of the relevant Grantee as a Participant, the vested but yet to exercised Options shall lapse at the date of the delivery of the resignation notice or employment relationship termination date decided by the Board;
(iv) in case of ceasing to be an Employee for any reason other than those specified in (m)(i)(ii)(iii) (for example, the company by which the relevant Grantee is employed is no longer a Subsidiary of the Group), the relevant Grantee may exercise the Options (to the extent vested yet to be exercised) within 90 days after the occurrence of any event disqualifying the relevant Grantee as a Participant, unless otherwise determined by the Board or Administration Committee;
(v) In case of the relevant Grantee being convicted for any criminal offence involving his integrity or honesty or violation of any contract entered between the relevant Grantee or his Associates and the Company or any Subsidiary, the vested but yet to exercised Options shall be deem to lapse at the date of the conviction or violation.

An option shall be subject to such terms and conditions (if any) as may be determined by the Board or the Administration Committee at the Offer Date and specified in the Offer of the Option. There is no minimum period for which any vested Option must be held before it can be exercised and no performance target which need to be achieved by a Grantee before the vested Options can be exercised.

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SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX I

(n) Ranking of the Shares

Shares allotted and issued on the exercise of an option will rank equally in all respects with the Shares in issue on the date of issuance.

(o) Rights are personal to the Grantee

Except for the transfer of an option on the death or permanent disabilities of a Grantee to his personal representatives, neither the option nor any rights in respect of it may be transferred, assigned or otherwise disposed of by any Grantee to any other person or entity. If a Grantee transfers, assigns or disposes of any such option or rights, whether voluntarily or involuntarily, then the relevant Option will immediately lapse.

(p) Rights on a general offer

If as a result of any general offer made to the holders of Shares, the Board or the Administration Committee becomes aware that the right to cast more than 50 per cent. of the votes which may ordinarily be cast on a poll at a general meeting of the Company has or will become vested in the offeror, any company controlled by the offeror or any person associated with or acting in concert with the offeror (“ General Offer ”), the Board or the Administration Committee will notify every Grantee of this as soon as possible after becoming so aware. All the Options already granted yet to be vested shall be vested on each Grantee immediately on the earlier of (i) the date of the Board or the Administration Committee’s notification to the Grantee; and (ii) the date on which the person making the offer obtains control of the Company. Each Grantee will be entitled to exercise his options (to the extent already vested, but not exercised) during Ten (10) business days starting on the later of the abovementioned dates. All options not exercised before the expiry of such period will lapse.

(q) Rights on company reconstructions

In the event of a compromise or arrangement, the Company shall give notice to all Grantees who have not exercised the already vested options on the same date as it gives notice of the meeting to its Shareholders or creditors to consider such a compromise or arrangement. All the Options already granted yet to be vested shall be vested to the relevant Grantee on the date of the aforementioned notice. Each Grantee may at any time thereafter, but before such time as shall be notified by the Company, exercise all or any of his Options (to the extent already vested, but not exercised), and subject to the Company receiving the exercise notice and the total subscription payment, the Company shall as soon as possible and in any event no later than the last business day immediately prior to the date of the proposed general meeting, allot, issue and register under the name of the Grantee such number of fully paid Shares which fall to be issued on exercise of such options. Any options not so exercised will lapse.

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SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX I

(r) Rights on winding up

In the event a notice is given by the Company to its Shareholders to convene a general meeting for the purpose of considering and, if thought fit, approving the voluntarily winding up of the Company, the Company shall on the same date give notice thereof to all the Grantees. All Options already granted yet to be vested shall be vested on each Grantee immediately on the date of such notice from the Company. Each Grantee (or his personal representative) shall be entitled to exercise all or any of his options (to the extent not already exercised) at any time thereafter but before such time as shall be notified by the Company. The Company shall as soon as possible and, in any event, no later than the last business day immediately prior to the date of the proposed general meeting, allot the relevant Shares to the Grantees credited as fully paid.

(s) Lapse of option

An option will lapse automatically and not be exercisable (to the extent not already exercised) on the earliest of: (a) the expiry of the Option Period; (b) the expiry of any of the period referred to in sub-paragraphs (j), (m), (o), (p) and (q); and (c) subject to sub-paragraph (r), the date of the commencement of the winding-up of the Company.

(t) Effect of alteration to capital

In the event of any alteration to the capital structure of the Company, whether by way of capitalization issue, rights issue, consolidation, reclassification, subdivision of shares, or reduction of share capital of the Company whilst any Option remains exercisable, the Board or the Administration Committee may make adjustments to the following items at its respective discretion:

(a) the maximum number of the Shares to be issued under the Share Option Scheme; and/or
(b) the number of the Shares corresponding to the unexercised Options; and/or
(c) the Exercise Price of the unexercised Options.

If the Board or the Administration Committee considers such adjustments (other than any made on a capitalization issue) are appropriate, the Auditors or an independent financial advisor appointed by the Company shall certify in writing to the Board or the Administration Committee to be in their opinion fair and reasonable, provided that:

(a) any such adjustments shall be made on the basis that the total payment for the subscription under the exercise of all options shall be as close as possible to, but not in excess of the previous amount;
(b) no such adjustments shall be made the effect of which would enable any Share to be issued at less than its nominal value or to increase the proportion of the issued share capital of the Company for which any option holder would have been entitled to subscribe had he exercised all the options held by him immediately prior to such adjustments; and

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SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX I

(c) the adjustment satisfies the requirements of the Chapter 17 of the Listing Rules and such applicable guidance and/or interpretation of the Listing Rules from time to time issued by the Stock Exchange.

(u) Cancellation of options

Subject to the consent from a Grantee, the Board or the Administration Committee may cancel whole or parts of Options (which has been vested but not yet exercised) from the date specified in writing to the Grantees (the “ Cancellation Date ”), either;

(i) the Company pays to the relevant Grantee an amount equal to the fair market value of the Option at the date of Cancellation Date as determined by the Board or the Administration Committee at its respective absolute discretion, after consultation with the Auditors or an independent financial advisor appointed by the Company;
(ii) the Board or the Administration Committee offers to grant to the relevant Grantee replacement options (or options under any other share option scheme) or makes such arrangements as the relevant Grantee may agree to compensate him for the loss of the Option; or
(iii) the Board or the Administration Committee makes other arrangements as the option holder may agree to compensate him for the cancellation of the option.

(v) Termination of the Share Option Scheme

The Company may by resolution in general meeting or the Board may at any time terminate the Share Option Scheme, upon which no new offers to grant Options under the Share Option Scheme will be made and any Options which have been granted within the valid period under the Share Option Scheme but not yet lapsed before the termination of the Share Option Scheme shall remain in force in all other aspects under the Share Option Scheme.

(w) Alteration of the Share Option Scheme

The Board may amend any of the provisions of the Share Option Scheme at any time except the following, which shall be approved by the Shareholders in general meetings:

(i) any amendments which are to the advantage of Participants in respect of matters contained in Rule 17.03 of the Listing Rules;
(ii) any amendments to the terms and conditions of the Share Option Scheme which are of a material nature or any amendments to the terms of any options granted, except those which will become effective automatically based on the current rules of the Share Option Scheme;
(iii) any amendments to the terms of options granted to a Grantee who is a Director, chief executive or Substantial Shareholder of the Company, or any of their respective Associates. Such persons and their respective connected persons must abstain from voting on the resolution to approve such amendment; and

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SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

APPENDIX I

(iv) any change to the authority of the Board in relation to any amendment of the rules of the Share Option Scheme.

The amended terms of the Share Option Scheme must continue to comply with the requirements of Chapter 17 of the Listing Rules and such applicable guidance and/or interpretation of the Listing Rules from time to time issued by the Hong Kong Stock Exchange.

(x) Conditions of the Share Option Scheme

(y) Voting and other rights

No voting rights shall be exercisable and no dividends shall be payable in respect of Options that have not been exercised.

(z) Compensation Mechanism

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NOTICE OF GENERAL MEETING

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(Incorporated in Hong Kong with limited liability) (Stock code: 3360)

Notice is hereby given that a general meeting (the “ GM ”) of Far East Horizon Limited (the “ Company ”) will be held at Chief Executive Suite I, 5th Floor, Grand Hyatt Hong Kong, 1 Harbour Road, Hong Kong on Monday, July 7, 2014 at 10:00 a.m. for the following purposes:

ORDINARY RESOLUTION

“ THAT the share option scheme of the Company (“ Share Option Scheme ”), the rules of which are presented at the meeting and, for the purposes of identification, signed by the chairman of the meeting and summarized in the circular of the Company dated June 19, 2014, be hereby approved and adopted and the directors of the Company be and are hereby authorized to do all such acts and to enter into all such transactions, arrangements and agreements as may be necessary or expedient in order to give full effect to the Share Option Scheme including without limitation:

(a) administering, modifying, interpreting the Share Option Scheme and granting options under the Share Option Scheme;
(b) establishing the Administration Committee to administer the Share Option Scheme under the supervision of the Board and adjusting the composition of the Administration Committee and its terms of reference;
(c) modifying and/or amending the rules of the Share Option Scheme from time to time provided that such modification and/or amendment is effected in accordance with the provisions of the Share Option Scheme relating to modification and/or amendment and the requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“ Stock Exchange ”);
(d) issuing and allotting from time to time such number of Shares in the capital of the Company as may be required to be issued pursuant to the exercise of the Options granted under the Share Option Scheme; and
(e) making application at the appropriate time or times to the Stock Exchange for the listing of, and permission to deal in, any Shares or any part thereof that may from time to time be issued and allotted pursuant to the exercise of the Options granted under the Share Option Scheme.”

By Order of the Board Far East Horizon Limited Liu Deshu

Chairman

Hong Kong, June 19, 2014

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NOTICE OF GENERAL MEETING

Notes:

All resolutions at the GM will be taken by poll pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”) and the results of the poll will be published on the websites of Hong Kong Exchanges and Clearing Limited and the Company in accordance with the Listing Rules.
Any member of the Company entitled to attend and vote at the GM is entitled to appoint another person as his proxy to attend and vote instead of him. A member may appoint more than one proxy to attend on the same occasion. A proxy need not be a member of the Company and a member may appoint more than one proxy to attend on the same occasion.
Receipt by the Company of an instrument of proxy shall not preclude a member from attending and voting in person at the GM.
The instrument appointing a proxy shall be in writing signed by the appointor, or his agent duly authorized in writing, or, if the appointor is a corporation, shall either be executed under its common seal or be signed by some agent or officer duly authorized in that behalf. The directors of the Company may, but shall not be bound to, require evidence of the authority of any such agent or officer.
In case of joint holders, the vote of the senior who tenders a vote shall be accepted to the exclusion of the votes of the other joint holders, and seniority shall be determined by the order in which the names of the holders stand in the register of members.
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 share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof.
For determining the entitlement to attend and vote at the GM, the register of members of the Company will be closed on Monday, 7 July 2014, during which day no transfer of shares will be registered. In order to be eligible to attend and vote at the GM, all completed transfers of shares, accompanied by the relevant share certificates, must be lodged with the Company’s share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, for registration not later than 4:30 p.m. on Friday, 4 July 2014.

As at the date hereof, the executive directors of the Company are Mr. KONG Fanxing and Mr. WANG Mingzhe, the non-executive directors of the Company are Mr. LIU Deshu (Chairman), Mr. YANG Lin, Mr. LIU Haifeng David, Mr. KUO Ming-Jian and Mr. John LAW, and the independent non-executive directors of the Company are Mr. CAI Cunqiang, Mr. HAN Xiaojing, Mr. LIU Jialin and Mr. YIP Wai Ming.

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AI assistant

Far East Horizon Limited — Proxy Solicitation & Information Statement 2014

50823_rns_2014-06-18_18a0e543-98b2-4326-96e6-68d783df15af.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

PROPOSED ADOPTION OF SHARE OPTION SCHEME AND NOTICE OF GENERAL MEETING

DEFINITIONS

DEFINITIONS

DEFINITIONS

PROPOSED ADOPTION OF SHARE OPTION SCHEME AND NOTICE OF GENERAL MEETING

INTRODUCTION

PROPOSED ADOPTION OF SHARE OPTION SCHEME

Conditions of the adoption of the Share Option Scheme

Application for Listing

Participants

Reasons for Adopting the Share Option Scheme

Value of the Options

Scheme Mandate Limit and Maximum Number of Shares Issuable

Acceptance of an offer of Options

Vesting of Options

Exercise price

Transferability of Options

Compensation Mechanism

Termination

RESPONSIBILITY STATEMENT

GENERAL MEETING AND PROXY ARRANGEMENT

VOTING AT THE GENERAL MEETING

LETTER FROM THE BOARD

SCHEME RULES FOR INSPECTION

RECOMMENDATION

(a) Purpose of the Share Option Scheme

(b) Who may join

(c) Maximum number of Shares in respect of which options may be granted

(d) Maximum entitlement of each individual

(e) Grant of Options to connected persons

(f) Restriction on the time of grant of Options

(g) Restriction on the time of acceptance and exercise of Options

(h) Acceptance of an offer of Options

(i) Vesting of Options

(j) Vesting conditions

(k) Exercise price

(l) Duration of the Share Option Scheme

(m) Time of exercise of Options

(n) Ranking of the Shares

(o) Rights are personal to the Grantee

(p) Rights on a general offer

(q) Rights on company reconstructions

APPENDIX I

(r) Rights on winding up

(s) Lapse of option

(t) Effect of alteration to capital

(u) Cancellation of options

(v) Termination of the Share Option Scheme

(w) Alteration of the Share Option Scheme

(x) Conditions of the Share Option Scheme

(y) Voting and other rights

(z) Compensation Mechanism

ORDINARY RESOLUTION

NOTICE OF GENERAL MEETING

More from Far East Horizon Limited

Far East Horizon Limited Proxy Solicitation & Information Statement 2014