Global Strategic Group Limited — Proxy Solicitation & Information Statement 2002

Nov 7, 2002

IMPORTANT THIS CIRCULAR REQUIRES YOUR IMMEDIATE ATTENTION

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.

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

If you have sold all your shares in DIGITALHONGKONG.COM you should at once hand this circular and the accompanying pink form of proxy to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

==> picture [106 x 45] intentionally omitted <==

DIGITALHONGKONG.COM

(Incorporated in the Cayman Islands with limited liability)

Directors: Paul Kan Man Lok (Chairman) John Wong Yuk Lung Shirley Ha Suk Ling Francis Gilbert Knight Ho Yiu Ming

Principal Office: Room 1702 One Exchange Square 8 Connaught Place Hong Kong

• Independent non-executive Directors

7 November 2002

To the shareholders

Dear Sir or Madam,

NEW SHARE OPTION SCHEME AND GENERAL MANDATE TO ISSUE SHARES

INTRODUCTION

On 27 March 2000, DIGITALHONGKONG.COM (the “Company”) adopted the existing share option scheme (the “Existing Share Option Scheme”) relating to the grant of options to directors and employees of the Company and its subsidiaries (the “Group”) to subscribe for shares of the Company. As The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) has amended Chapter 23 of the Rules Governing the Listing of Securities on the Growth Enterprise Market (“GEM”) of the Stock Exchange (the “GEM Listing Rules”) relating to share option schemes, it is proposed to adopt a new share option scheme (the “New Share Option Scheme”) to replace the Existing Share Option Scheme.

– 1 –

It is also proposed to grant to the directors of the Company (the “Directors”) general mandate to issue shares of the Company.

The purpose of this circular is to give you further details of the abovementioned proposals and to convene an extraordinary general meeting to consider and, if thought fit, approve the resolutions necessary for the proposals to be implemented.

EXISTING SHARE OPTION SCHEME

Under the Existing Share Option Scheme, as at 4 November 2002 (the “Latest Practicable Date”), being the latest practicable date prior to the printing of this circular, no option to subscribe for shares of the Company has been granted. The Directors do not expect that any option will be granted under the Existing Share Option Scheme before its termination. If any option is granted under the Existing Share Option Scheme, they still will be exercisable after the termination of the Existing Share Option Scheme.

NEW SHARE OPTION SCHEME

Principal terms of the New Share Option Scheme

A summary of the rules of the New Share Option Scheme is set out in the appendix to this circular.

Reasons for the New Share Option Scheme

Under the New Share Option Scheme, the Directors may grant options without any initial payment to any director, employee or consultant of the Group or any customer, supplier or adviser whose service to the Group or business with the Group may contribute to the business and operation of the Group. The New Share Option Scheme will enable the Group to offer valuable incentive to attract and retain quality personnel and other persons to work to increase the value of the shares of the Company. To this end, the Directors may specify the minimum period, if any, for which an option must be held or the performance targets, if any, that must be achieved before the option can be exercised.

Conditions of the New Share Option Scheme

The New Share Option Scheme is conditional on:

• (a) the approval of the shareholders of the Company at an extraordinary general meeting to be held;

• (b) the approval of shareholders of Champion Technology Holdings Limited (“Champion”), the holding company of the Company, at a special general meeting to be held; and

• (c) the Listing Committee of the Stock Exchange granting listing of and permission to deal in the new shares of the Company which may be issued and allotted pursuant to the exercise of options granted under the New Share Option Scheme up to 10% of the share capital of the Company in issue on the date of shareholders’ approval of the New Share Option Scheme.

Note: The Company has been informed by Champion that its special general meeting to approve the New Share Option Scheme is scheduled to be held on 29 November, 2002.

– 2 –

Value of the options

The Directors consider it inappropriate to value all the options that can be granted under the New Share Option Scheme on the assumption that they were granted on the Latest Practicable Date as a number of factors crucial for the valuation cannot be determined. Such factors include the exercise price, the exercise period, expected volatility of the Company’s shares and the conditions, such as performance targets, if any, that an option is subject to. Accordingly any valuation of the options based on a large number of speculative assumptions would not be meaningful but would be misleading to the shareholders.

Listing and dealings

Application has been made to the GEM Listing Committee of the Stock Exchange for the granting of listing of and permission to deal in the new shares of the Company which may be issued and allotted pursuant to the New Share Option Scheme.

The shares of the Company are only listed on GEM of the Stock Exchange and not on any other stock exchange.

GENERAL MANDATE TO ISSUE SHARES

It is further proposed to grant a general mandate to the Directors to allot, issue and dispose of shares of the Company not exceeding 20 per cent. of the issued share capital of the Company on the date of the relevant resolution to provide flexibility to the Company to raise fund by issue of shares efficiently.

EXTRAORDINARY GENERAL MEETING

You will find on pages 9 to 10 of this circular a notice of an extraordinary general meeting to be held at 10:05 a.m. on 29 November 2002 (or so soon thereafter as the annual general meeting of the Company convened for the same day at 10:00 a.m. shall have concluded or adjourned) at Room 1702 One Exchange Square, 8 Connaught Place, Hong Kong.

Resolution no. 1 will be proposed as an ordinary resolution to approve the termination of the Existing Share Option Scheme and the adoption of the New Share Option Scheme.

Resolution no. 2 will be proposed as an ordinary resolution to give a general mandate to the Directors to allot, issue and deal with Shares with an aggregate nominal value not exceeding 20 per cent. of the share capital of the Company in issue as at the date of the resolution.

There is enclosed a pink form of proxy for use at the extraordinary general meeting. You are requested to complete the form of proxy and return it to the principal office of the Company in accordance with the instructions printed thereon not less than 48 hours before the time fixed for holding the meeting, whether or not you intend to be present at the meeting. The completion and return of the form of proxy will not prevent you from attending and voting in person should you so wish.

– 3 –

RECOMMENDATION

The Directors believe that the proposals are in the best interest of the Company and the shareholders. Accordingly the Directors recommend you to vote in favour of all the resolutions to be proposed at the forthcoming extraordinary general meeting of the Company.

RESPONSIBILITY STATEMENT

This circular, for which the directors of the Company collectively and individually accept full responsibility, includes particulars given in compliance with the GEM 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:–

• (a) the information contained in this circular is accurate and complete in all material respects and not misleading;

• (b) there are no other matters the omission of which would make any statement in this circular misleading; and

• (c) all opinions expressed in this circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

DOCUMENT AVAILABLE FOR INSPECTION

A draft of the rules of the New Share Option Scheme will be available for inspection at the offices of Jennifer Cheung & Co. at Unit A, 19th Floor, Two Chinachem Plaza, 68 Connaught Road Central, Hong Kong during normal business hours up to and including 29 November 2002 and at the forthcoming extraordinary general meeting.

Yours faithfully, Paul Kan Man Lok Chairman

– 4 –

SUMMARY OF RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX

PURPOSE OF THE SCHEME

The New Share Option Scheme is set up for the purpose of attracting and retaining quality personnel and other persons to provide incentive to them to contribute to the business and operation of the Group.

WHO MAY JOIN

The Directors may at their discretion grant options to (i) any director, employee or consultant in respect of business, operation, management, technology, legal, accounting and financial matters of the Group or a company in which the Group holds an equity interest or a subsidiary of such company (“Affiliate”); or (ii) any discretionary trust whose discretionary objects include any director, employee or consultant of the aforesaid nature of the Group or an Affiliate; or (iii) a company beneficially owned by any director, employee or consultant of the aforesaid nature of the Group or an Affiliate; or (iv) any customer, supplier or consultant of the aforesaid nature whose service to the Group or business with the Group contributes or is expected to contribute to the business or operation of the Group as may be determined by the Directors from time to time to subscribe for shares.

PRICE OF SHARES

Options may be granted without any initial payment for the options at an exercise price (subject to adjustments as provided therein) equal to the highest of (i) the nominal value of the shares; (ii) the closing price per share as stated in the Stock Exchange’s daily quotations sheet on the date of the grant of the option; and (iii) the average closing price per share as stated in the Stock Exchange’s daily quotations sheets for the five business days immediately preceding the date of the grant of the option.

MAXIMUM NUMBER OF SHARES

The maximum number of shares which may be issued upon the exercise of all options to be granted under the New Share Option Scheme and any other share option scheme(s) of the Company shall not exceed 10 per cent. of the share capital of the Company in issue at the date of shareholders’ approval of the New Share Option Scheme (Note 1) (the “General Mandate Limit”) provided that:

• (a) the Company may seek approval by shareholders in general meeting to refresh the General Mandate Limit up to 10 per cent. of the issued share capital of the Company at the date of the shareholders’ approval to refresh the limit; and

• (b) the Company may seek separate shareholders’ approval in general meeting to grant options beyond the General Mandate Limit provided that the options in excess of the General Mandate Limit are granted only to participants specifically identified by the Company before such approval is sought,

subject to the limitation that the maximum number of Shares which may be issued or issuable upon exercise of all outstanding options granted and yet to be exercised under the New Share Option Scheme and any other share option scheme(s) of the Company shall not exceed 30 per cent. of the issued share capital of the Company from time to time.

– 5 –

SUMMARY OF RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX

The maximum number of shares (issued and to be issued) in respect of which options may be granted under the New Share Option Scheme to any one grantee in any 12-month period shall not exceed 1 per cent. of the share capital of the Company in issue on the last date of such 12-month period unless approval of the shareholders of the Company has been obtained in accordance with the GEM Listing Rules.

Note 1: Based on 150,000,000 shares of the Company of HK$0.10 each (“Shares”) in issue as at the Latest Practicable Date, this represents 15,000,000 Shares

GRANT OF OPTIONS TO CONNECTED PERSONS

Any grant of options to a director, chief executive, management shareholder or substantial shareholder of the Company or any of their respective associates must be approved by the independent non-executive Directors (excluding any independent non-executive Director who is the grantee of the option).

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 would result in the shares issued and to be issued upon exercise of all options already granted (including options exercised, cancelled and outstanding) and to be granted to such person in the 12-month period up to and including the date of the grant of such options to represent in aggregate over 0.1 per cent. of the total issued shares for the time being and have an aggregate value (based on the closing price of a share at each date of the grant of these options) exceeding HK$5,000,000, the proposed grant shall be subject to the approval of shareholders of the Company in general meeting in accordance with the requirements of the GEM Listing Rules.

TIME OF EXERCISE OF OPTION

The holder may subscribe for shares during such period as may be determined by the Directors (which shall be less than ten years from the date of grant of the relevant option and may include the minimum period, if any, for which an option must be held before it can be exercised).

PERFORMANCE TARGETS

The Directors may at their absolute discretion specify the performance targets, if any, that must be achieved before the option can be exercised. (Note 2)

Note 2: No particular performance target to be achieved before options are exercised has been identified by the Company for the time being.

RIGHTS ARE PERSONAL TO GRANTEE

An option may not be transferred or assigned and will be personal to the holder of the option.

RIGHTS ON CEASING EMPLOYMENT

If a holder of an option is disabled or retires in accordance with the terms of his employment with the Group, the holder may exercise the option within a period of six months thereafter or at the expiration of the relevant option period, whichever is earlier, failing which the option will lapse.

– 6 –

SUMMARY OF RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX

RIGHTS ON DEATH

If a holder of an option dies, the personal representatives of the holder may exercise the option within a period of six months thereafter or at the expiration of the relevant option period, whichever is earlier, failing which the option will lapse.

RIGHTS ON DISMISSAL

If the holder of an option resigns or is dismissed from the employment of the Group, the option of such holder will thereupon lapse.

EFFECT OF ALTERATIONS TO CAPITAL

In the event of any reduction, sub-division or consolidation of the share capital of the Company or capitalisation issue, rights issue or distribution of capital assets by the Company, the number or nominal amount of shares comprised in each option and/or the option price may be adjusted in such manner as the Directors (having received a statement in writing from the auditors of the Company that in their opinion the adjustments proposed satisfy the requirements set out in the note to Rule 23.03(13) of the GEM Listing Rules) may deem appropriate, provided always that an option holder shall have the same proportion of the equity capital of the Company as that to which he was entitled before such adjustments and no increase shall be made in the aggregate subscription price relating to any option, but no such adjustments may be made to the extent that a share would be issued at less than its nominal value.

RIGHTS ON A GENERAL OFFER

If a general offer is made to the holders of shares, each holder of option shall be entitled at any time within the period of six months after such control has been obtained to exercise any option in whole or in part, and to the extent that it has not been so exercised, any option shall upon the expiry of such period cease and determine.

RIGHTS ON WINDING UP

If notice is duly given of a general meeting at which a resolution will be proposed for the voluntary winding-up of the Company, every option shall be exercisable in whole or in part at any time thereafter until the resolution is duly passed or defeated or the meeting concluded or adjourned sine die, whichever shall first occur. If such resolution is duly passed, all options shall, to the extent that they have not been exercised, thereupon cease and terminate.

RIGHTS ON A COMPROMISE OR ARRANGEMENT

If a compromise or arrangement between the Company and its members or creditors is proposed, each holder of option may exercise his option forthwith until the expiry of two calendar months thereafter or the date on which such compromise or arrangement is sanctioned by the Court, whichever is earlier, subject to such compromise or arrangement being sanctioned by the Court and becoming effective.

– 7 –

SUMMARY OF RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX

RANKING OF SHARES

Shares allotted on the exercise of options will rank pari passu with the other shares in issue at the date of exercise of the relevant option except in respect of any dividend or other distribution previously resolved or announced to be paid or made if the record date therefor is before the relevant exercise date.

PERIOD OF THE SCHEME

The New Share Option Scheme will remain in force for a period of 10 years from the date of adoption of such scheme.

VARIATION

Except as allowed by the GEM Listing Rules in effect from time to time or with the prior approval of shareholders in general meeting, no alteration shall be made to the provisions of the New Share Option Scheme relating to any of the above matters or of the terms or conditions of the New Share Option Scheme which are of a material nature or change the terms of options granted under the New Share Option Scheme, except where the alteration take effect automatically under the existing terms of the New Share Option Scheme. The Directors may terminate the New Share Option Scheme at any time, but options granted prior to such termination but not yet exercised at the time of termination shall continue to be valid and exercisable in accordance with the rules of such scheme.

CANCELLATION OF UNEXERCISED OPTION

The Company may cancel an option granted under the New Share Option Scheme but not exercised with the approval of the holder of such option. If the Company cancels options and issues new ones to the same option holder, the issue of such new options may only be made under the New Share Option Scheme with available unissued options (excluding the cancelled options) within the limit approved by shareholders as mentioned in the paragraph headed “Maximum number of shares” above.

APPROVAL OF THE SHAREHOLDERS OR INDEPENDENT NON-EXECUTIVE DIRECTORS OF CHAMPION TECHNOLOGY HOLDINGS LIMITED

So long as (i) the Listing Rules Governing the Listing of Securities on the Stock Exchange or the GEM Listing Rules so requires; (ii) Champion Technology Holdings Limited (“Champion”) is the holding company of the Company and (iii) the shares of Champion and the Company are listed on the Stock Exchange, any provision in the New Share Option Scheme requiring the approval of shareholders or independent non-executive directors (as the case may be) of the Company must also simultaneously be approved by the shareholders or independent non-executive directors (as the case may be) of Champion.

– 8 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [106 x 45] intentionally omitted <==

DIGITALHONGKONG.COM

(Incorporated in the Cayman Islands with limited liability)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the abovementioned company (the “Company”) will be held at Room 1702, One Exchange Square, 8 Connaught Place, Hong Kong on 29 November 2002 at 10:05 a.m. (or so soon thereafter as the annual general meeting of the Company convened for the same day at 10:00 a.m. shall have concluded or adjourned) for the purpose of considering and, if thought fit, passing the following resolutions as ordinary resolutions:

ORDINARY RESOLUTIONS

1. “ THAT :

2. (a) the existing share option scheme of the Company adopted on 27 March 2000 be and is hereby terminated; and

3. (b) subject to the approval of the shareholders of Champion Technology Holdings Limited, the rules of the new share option scheme of the Company (a copy of which has been submitted to the meeting and signed by the Chairman of the meeting for the purpose of identification) be and are hereby approved and that the directors of the Company be and are hereby authorised to implement the same and to grant options and to issue and allot shares of the Company pursuant thereto.”

4. “ THAT :

5. (a) subject to paragraph (c) of this resolution, the exercise by the directors of the Company during the Relevant Period of all powers of the Company to allot shares and to make and grant offers, agreements and options which would or might require shares to be allotted be and is hereby generally and unconditionally approved;

6. (b) the approval in paragraph (a) shall authorise the directors of the Company during the Relevant Period to make and grant offers, agreements and options which would or might require shares to be allotted after the end of the Relevant Period;

7. (c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the directors of the Company pursuant to the approval in paragraph (a), otherwise than pursuant to shares issued as a result of a Rights Issue or a scrip dividend of the Company or the exercise of the subscription rights under the share option scheme of the Company, shall not exceed 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue on the date of this resolution, and the said approval shall be limited accordingly;

– 9 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

• (d) for the purpose of this resolution:

“Relevant Period” means the period from the passing of this resolution until whichever is the earlier of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the articles of association of the Company or any applicable law to be held; and

• (iii) the revocation or variation of this resolution by an ordinary resolution of the shareholders of the Company in general meeting; and

“Rights Issue” means an offer of shares open for a period fixed by the directors of the Company to holders of shares on the register of members of the Company on a fixed record date in proportion to their then holdings of such shares (subject to such exclusions or other arrangements as the directors of the Company may deem necessary or expedient in relation to fractional entitlements or legal or practical problems under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory).”

By Order of the Board Jennifer, Cheung Mei Ha Secretary

Hong Kong, 7 November 2002

Principal office:

Room 1702 One Exchange Square 8 Connaught Place Hong Kong

Notes:

1. A member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint proxies to attend and vote in his stead. A proxy need not be a member of the Company.

2. In order to be valid, a pink form of proxy must be deposited at the Company’s principal office together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power of attorney or authority, not less than 48 hours before the time for holding the meeting or adjourned meeting.

– 10 –