Grand Pharmaceutical Group Limited — Proxy Solicitation & Information Statement 2002

Apr 25, 2002

IMPORTANT

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

I f you have sold or transferred all your shares in China Apollo 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.

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CHINA APOLLO HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

PROPOSED TERMINATION OF EXISTING SHARE OPTION SCHEME AND

ADOPTION OF A NEW SHARE OPTION SCHEME AND

PROPOSED CHANGE OF NAME

A notice convening a special general meeting of China Apollo Holdings Limited to be held at 10:00 a.m. on Friday, 17th May, 2002 at 10th Floor, Cammer Commercial Building, 30-32 Cameron Road, Tsimshatsui, Kowloon, Hong Kong is set out on pages 15 of this circular. Whether or not shareholders are able to attend the meeting, they are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the head office and principal place of business of the Company in Hong Kong at 10th Floor, Cammer Commercial Building, 30-32 Cameron Road, Tsimshatsui, Kowloon, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the meeting. Completion and return of the form of proxy will not preclude shareholders from attending and voting in person at the meeting or any adjourned meeting should they so desire.

23rd April, 2002

RESPONSIBILITY STATEMENT

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

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DEFINITIONS

In this circular and the appendix to it, the following expressions have the following meaning unless the context requires otherwise:

“Board”	the board of Directors of the Company;
“Company”	China Apollo Holdings Limited;
“Directors”	directors of the Company;
“Effective Date”	the date on which the change of name of the Company becomes
	effective;
“Existing Scheme”	the share option scheme adopted by the Company on 2nd
	December, 1995;
“Existing Option(s)”	option(s) to subscribe for Shares granted by the Company under
	the Existing Scheme;
“Group”	the Company and its subsidiaries;
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China;
“Issued Share Capital”	the issued ordinary share capital of the Company as at the
	Latest Practicable Date;
“Latest Practicable Date”	23rd April 2002;
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange;
“Options”	options that may be granted pursuant to the Share Option
	Scheme;
“Paticipants”	all full-time employee, Directors (including independent non-
	executive Directors) and part-time employees with weekly
	working hours of 10 hours and above, of the Group and any
	advisor (professional or otherwise) or consultant, distributors,
	suppliers, agents, customers, joint venture partners, service
	provider to the Group who the Board considers, in its sole
	discretion, have contributed or contribute to the Group;

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DEFINITIONS

“ Share Option Scheme” the share option scheme proposed to be adopted conditionally by the Company, the principal terms of which are summarised in Appendix I to this circular; “Share(s)” ordinary shares of $0.10 each of the Company existing on the date hereof and all other (if any) stock or shares from time to time and for the time being ranking pari passu therewith and all other (if any) stocks or shares in the equity share capital of the Company resulting from any sub-division, consolidation or re-classification of Shares;

• “Shareholders” holders of Shares; “Special General Meeting” a special general meeting of the Company to be held on 17th May, 2002;

• “Stock Exchange” The Stock Exchange of Hong Kong Limited; and “$” Hong Kong dollars.

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LETTER FROM THE BOARD OF DIRECTORS

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CHINA APOLLO HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

Directors:

Lo Yuk Yee Lok Fai Zang Jing-Wu Liu Juh, James

Registered Office: Clarendon House Church Street Hamilton HM 11 Bermuda

Independent non-executive directors Goh Gen Cheung Ho Kwok Wah, George Yuen Kin

Head office and principal place of business in Hong Kong: 10th Floor Cammer Commercial Building 30-32 Cameron Road Tsimshatsui, Kowloon Hong Kong

23rd April, 2002

To the Shareholder and the holders of Existing Options

Dear Sir or Madam,

(1) PROPOSED TERMINATION OF EXISTING SHARE OPTION SCHEME AND

ADOPTION OF A NEW SHARE OPTION SCHEME AND

(2) PROPOSED CHANGE OF NAME

INTRODUCTION

The Company proposes to put forward to its Shareholders for approval at the Special General Meeting, the following proposals:

• (1) that the Existing Scheme be terminated; and

• (2) that the Share Option Scheme be adopted.

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LETTER FROM THE BOARD OF DIRECTORS

The purpose of this document is to give notice to the Shareholders of the Special General Meeting at which resolutions will be proposed to consider and, if thought fit, terminate the Existing Scheme and approve the adoption of the Share Option Scheme.

(1) ADOPTION OF THE SHARE OPTION SCHEME

On 1st September, 2001, amendments were made to the Listing Rules concerning share option scheme. The Existing Scheme does not comply with amended Listing Rules that took effect on 1st September, 2001. Therefore, the Directors propose that the Existing Scheme be terminated and the Share Option Scheme which will comply with the amended rules be adopted. The Directors confirm that save for the Existing Scheme, the Company does not have any other share schemes. The principal terms of the Share Option Scheme are summarised in Appendix I to this circular.

The Directors consider that the Share Option Scheme will provide participants with the opportunity to acquire proprietary interests in the Company and to encourage participants to work towards enhancing the value of the Company and its Shares for the benefit of the Company and its Shareholders as a whole.

At the date of this circular, the total number of Existing Options granted was 20,000,000 representing approximately 2.5% of the Issued Share Capital. A total of (i) 15,100,000 Shares had been issued upon the exercise of such Existing Options representing approximately 1.89% of the Issued Share Capital and (ii) a total of 1,400,000 Existing Options had lapsed in accordance with the terms of the Existing Scheme, representing approximately 0.18% of the Issued Share Capital and (iii) 3,500,000 Existing Options remain unexercised, representing approximately 0.43% of the Issued Share Capital. The unexercised Existing Options will be valid until their respective expiry dates upon which they will lapse in accordance with the terms of the Existing Scheme save to the extent previously exercised.

Exercise of the outstanding Existing Options would result in 3,500,000 Shares being issued representing approximately 0.43% of the Issued Share Capital.

Assuming that there is no change in the issued share capital of the Company before adoption of the Share Option Scheme, on the basis of 800,000,000 Shares presently in issue (excluding the number of Shares issued upon the exercise of options granted pursuant to the Existing Scheme), the maximum number of Shares that can be issued on exercise of options that may be granted under the proposed Share Option Scheme is 80,000,000 representing approximately 10% of the Issued Share Capital.

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LETTER FROM THE BOARD OF DIRECTORS

The Share Option Scheme will comply with Chapter 17 of the Listing Rules and its adoption is conditional upon:—

• (a) the Shareholders passing an ordinary resolution to approve the Share Option Scheme at the Special General Meeting; and

• (b) the Stock Exchange granting the approval of the listing of and permission to deal in the Shares to be issued pursuant to the exercise of any Option that may be granted under the Share Option Scheme.

Application has been made to the Stock Exchange to approve (i) the Share Option Scheme, (ii) the subsequent granting of the options under the Share Option Scheme and (iii) the listing of and permission to deal in the Shares to be issued pursuant to the exercise of any Option that may be granted under the Share Option Scheme.

(2) PROPOSED CHANGE OF NAME

It is proposed that the Company’s name be changed from “China Apollo Holdings Limited” to “MAXX Bioscience Holdings Limited” with, (for the purpose of identification) “曼盛生物科技集團有限公司” as the new Chinese name of the Company, in order to better reflect those aspects of the business of the Company (in relation to the development, manufacture and sale of pharmaceutical products, being part of the principal activities of the Company) which the Directors expect will increasingly be its focus in future. The effective date of the proposed change of name will be the date on which the new name is entered by the Register of Companies in Bermuda on the register in place of the existing name.

Subject to the change of name proposal becoming effective, Shareholders may submit their existing share certificates during office hours to the Company’s branch share registrars in Hong Kong, Central Registration Hong Kong Limited at 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, in exchange for the new share certificates under the new name free of charge during the period from the Effective Date to Tuesday, 18th June, 2002 (both days inclusive). Thereafter, a fee of $2.50 per certificate to be cancelled and/or issued will be charged. New share certificates bearing the new name are expected to be available for collection by Shareholders approximately 10 business days after the submission of their existing share certificates. Unless otherwise instructed, new share certificates will continue to be issued in board lots of 2,000 Shares.

The Certificates for Shares in the existing name of the Company will continue to be effective as documents of title valid for trading, settlement and registration.

The Company will make a further announcement if and when the proposed name change becomes effective.

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LETTER FROM THE BOARD OF DIRECTORS

ACTION TO BE TAKEN

A form of proxy for use at the Special General Meeting is enclosed. Whether or not they intend to attend this meeting, Shareholders are requested to complete and return the form of proxy to the principal office of the Company in Hong Kong in accordance with the instructions printed thereon as soon as possible and in any event so as to arrive not less than 48 hours before the time fixed for holding the meeting or any adjournment thereof. The return of a form of proxy will not preclude Shareholders from attending and voting in person at the Special General Meeting if they so wish.

RECOMMENDATION

The Directors believe that the termination of the Existing Scheme and the adoption of the Share Option Scheme and the proposed change of name of the Company are in the best interests of the Company and the Shareholders. Accordingly, the Directors recommend all Shareholders to vote in favour of the resolutions for those purposes to be proposed at the Special General Meeting. They intend to do so themselves in respect of their own shareholdings in the Company.

GENERAL

Copies of the following documents are available for inspection during normal business hours at the head office and principal place of business of the Company at 10th Floor Cammer Commercial Building, 30-32 Cameron Road, Tsimshatsui, Kowloon, Hong Kong, up to and including Friday, 17th May, 2002:

• (a) the Existing Scheme;

• (b) the proposed Share Option Scheme; and

• (c) the Company’s memorandum of associaton and bye-laws.

Yours faithfully,

For and on behalf of the Board

China Apollo Holdings Limited Lo Yuk Yee

Chairman

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SUMMARY OF THE PRINCIPAL TERMS OF THE PROPOSED SHARE OPTION SCHEME

APPENDIX

The following is a summary of the terms required to be included in the Share Option Scheme as required by Chapter 17 of the Listing Rules:

1. The purpose of the Share Option Scheme is to provide Participants (as defined in paragraph 2 below) the opportunity to acquire proprietary interests in the Company and to encourage Participants to work towards enhancing the value of the Company and its Shares for the benefit of the Company and its Shareholders as a whole.

2. All full-time employee, Directors (including independent non-executive Directors) and part-time employees with weekly hours of 10 hours and above, of the Group and any advisor (professional or otherwise) or consultant, distributors, suppliers, agents, customers, joint venture partners, service provider to the Group who the Board considers, in its sole discretion, have contributed or contribute to the Group (“Participants”) are eligible to participate in the Share Option Scheme.

3. The number of shares which may be issued upon exercise of all Options to be granted under the Share Option Scheme and any other share option schemes of the Company must not in aggregate exceed 10% of the Shares in issue on the date of adoption of the Share Option Scheme (as at the Latest Practicable Date such 10% limit represents 80,000,000 Shares. However, the Company may refresh this 10% limit with Shareholders’ approval, provided that each such renewal may not exceed the 10% of the Shares in issue as at the date of the shareholders’ approval. Options previously granted under the Existing Scheme and Options granted under the Share Option Scheme (including those outstanding, cancelled, lapsed in accordance with the respective scheme or exercised options) will not be counted for the purpose of calculating the limit as “refreshed”. 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 that the Options in excess of the limit are granted only to the Participants specifically identified by the Company before such approval is sought.

The total number of Shares which may be issued upon exercise of all outstanding Options granted and yet to be exercised under the Share Option Scheme and other share option schemes adopted by the Company must not exceed 30% of the Shares in issue from time to time. No Option may be granted under the Share Option Scheme or any other share option scheme adopted by the Company if that will result in the 30% limit being exceeded.

1. Unless approved by Shareholders in the manner as set out below, the maximum entitlement of each Participant (including both exercised and outstanding Options) under the Share Option Scheme or any other share option scheme adopted by the Company, in any 12 months period, must not exceed 1% of the Shares in issue. Where any further grant of Options to a participant would result in the Shares issued and to be issued upon

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SUMMARY OF THE PRINCIPAL TERMS OF THE PROPOSED SHARE OPTION SCHEME

APPENDIX

exercise of all options (including Options) granted and to be granted to such person (including exercised, cancelled and outstanding options) in the 12-month period up to and including the date of such further grant representing in aggregate over 1% of the issued ordinary share capital of the Company, such further grant must be separately approved by Shareholders of the Company in general meeting with such Participant and his associates (as such term is defined in the Listing Rules) abstaining from voting. A circular must be sent to the Shareholders disclosing the identity of the Participant, the number and terms of the options to be granted (and options previously granted to such participant). The number and terms (including the exercise price) of options to be granted to such participant must be fixed before Shareholders’ approval and the date of board meeting for proposing such further grant is to be taken as the date of grant for the purpose of calculating the exercise price.

1. Any grant of Options to any Director, chief executive or substantial shareholder of the Company or any of their respective associates (as defined in the Listing Rules) shall be subject to the prior approval of any independent non-executive Directors (excluding the independent non-executive Director who is the grantee of the relevant Options). Where any grant of Options to a substantial shareholder (as defined in the Listing Rules) of the Company or any independent non-executive Director or their respective associates (as defined in the Listing Rules) would result in the number of Shares issued and to be issued upon exercise of options granted (including options exercised, cancelled and outstanding) to such person in the 12-month period up to and including the date of the offer of such grant:

2. (a) representing in aggregate over 0.1 per cent of the Shares in issue on the date of the offer; and

3. (b) having an aggregate value in excess of HK$5 million, based on the closing price of the Shares at the date of each offer,

such further grant of Options will be subject to the issue of a circular by the Company and the approval of the Shareholders in general meeting on a poll at which all connected persons (as defined in the Listing Rules) of the Company shall abstain from voting, and/ or such other requirements prescribed under the Listing Rules from time to time. A connected person (as defined in the Listing Rules) of the Company will be permitted to vote against the grant only if his intention to do so has been stated in the circular.

1. (a) The period (the “Option 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 date of grant of the Option (being the business day on which the Directors resolves to make an offer of Option to the relevant Grantee).

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SUMMARY OF THE PRINCIPAL TERMS OF THE PROPOSED SHARE OPTION SCHEME

APPENDIX

• (b) In the event a Grantee, if an employee, ceases to be an employee of the Group for any reason other than (i) on his/her death or (ii) the termination of his/her employment on one or more of the grounds specified in paragraph 13(g) below, the Option shall lapse on the date of cessation of such employment and not be exercisable unless the Board otherwise determines in which event the Option shall be exercisable to the extent and within such period as the Board may determine. The date of cessation of employment shall be the last actual working day on which the participant was physically at work with the Company or the relevant Subsidiary, whether salary is paid in lieu of notice or not.

• (c) In the event the Grantee, if an employee of the Group, dies before exercising his or her Option in full and none of the events which would be a ground for termination of his or her employment under paragraph 13(g) below, then exists, the personal representative(s) of the participant shall be entitled within a period of 12 months from the date of death to exercise his or her Option up to the entitlement of such Grantee as at the date of death.

• (d) If a general offer by way of takeover (other than by way of scheme of arrangement pursuant to paragraph (e) below) is made to all the holders of Shares (or all such holders other than the offeror, any person controlled by the offeror and any person acting in association or concert with the offeror) and such offer becomes or is declared unconditional prior to the expiry date of the relevant option, the Company shall forthwith give notice thereof to the participant and the Grantee shall be entitled to exercise the Option either to its full extent or to the extent notified by the Company at any time within such period as shall be notified by the Company.

• (e) If a general offer by way of scheme of arrangement is made to all the holders of Shares and has been approved by the necessary number of holders of Shares at the requisite meetings, the Company shall forthwith give notice thereof to the Grantee and the Grantee may at any time thereafter (but before such time as shall be notified by the Company) exercise the Option either to its full extent or to the extent notified by the Company.

• (f) In the event a notice is given by the Company to its Shareholders to convene a Shareholders’ meeting for the purpose of considering and, if thought fit, approving a resolution to voluntarily wind-up the Company, the Company shall forthwith give notice thereof to the Grantee and the Grantee may at any time thereafter (but before such time as shall be notified by the Company) exercise the Option either to its full extent or to the extent notified by the Company, and the Company shall as soon as possible and in any event no later than three days prior to the date of the proposed Shareholders’ meeting, allot, issue and register in the name of the Grantee such number of fully paid Shares which fall to be issued on exercise of such Option.

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SUMMARY OF THE PRINCIPAL TERMS OF THE PROPOSED SHARE OPTION SCHEME

APPENDIX

• (g) In the event of a compromise or arrangement, other than a scheme of arrangement contemplated in paragraph (e) above, between the Company and its members or creditors being proposed in connection with a scheme for the reconstruction or amalgamation of the Company, the Company shall give notice thereof to all Grantees on the same day as it gives notice of the meeting to its members or creditors to consider such a scheme or arrangement and the Grantees may at any time thereafter but before such time as shall be notified by the Company exercise his or her Option either to its full extent or to the extent notified by the Company, and the Company shall as soon as possible and in any event no later than three days prior to the date of the proposed meeting, allot, issue and register in the name of the Grantee such number of fully paid Shares which fall to be issued on exercise of such Option.

• (h) Upon the occurrence of any of the events referred to in 6(d), (e), (f) and (g) above, the Company may in its discretion and notwithstanding the terms of the relevant Option also give notice to a Grantee that his or her Option may be exercised at any time within such period as shall be notified by the Company and/ or to the extent (not being less than the extent to which it could then be exercised in accordance with its terms) notified by the Company. If the Company gives such notice, the balance of the Option shall lapse.

• The Share Option Scheme does not stipulate a minimum period for which an Option must be held before it can be exercised, however, at the time of grant of an Option, the Company may specify a minimum period for which an Option must be held before it can be exercised.

• The Share Option Scheme does not stipulate the performance targets which must be achieved before the Option can be exercised, however, at the time of the grant of an Option, the Company may specify performance targets which must be achieved before the Options can be exercised.

• The amount payable to the Company upon acceptance of an Option is HK$1 and an offer shall remain open for acceptance by the Participant for a period of 14 days from the date on which the letter containing the offer is delivered to that Participant.

• The subscription price for the Shares the subject of an Options shall be no less than the higher of (i) the closing price of the Shares as stated in the daily quotations sheets issued by the Stock Exchange on the date of grant of the Option; (ii) the average closing price of the Shares as stated in the daily quotations sheets issued by the Stock Exchange for the five business days immediately preceding the date of grant; and (iii) the nominal value of a Share on the date of grant. The subscription price will be established by the Board at the time the Option is granted to the relevant Participant.

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SUMMARY OF THE PRINCIPAL TERMS OF THE PROPOSED SHARE OPTION SCHEME

APPENDIX

1. The Shares to be allotted and issued upon the exercise of an Option will be subject to all the provisions of the memorandum of association and bye-laws of the Company in force or the relevant time and will rank pari passu with the fully paid Shares in issue on the date the name of the Option holder is registered on the register of members of the Company. Prior to the Option holder being registered on the register of members of the Company, the Option holder shall not have any voting rights, or rights to participate in any dividends or distributions of any rights arising on a liquidation of the Company, in respect of the Shares to be issued upon the exercise of the Option.

2. No Options may be granted under the Share Option Scheme after the 10th anniversary of the adoption of the Share Option Scheme.

3. An Option shall lapse automatically and not be exercisable, to the extent not already exercised, on the earliest of:

4. (a) the expiry of the Option period;

5. (b) the expiry of the period for exercising the Option as referred to in paragraphs 6(b), (c), (f) and (g) above;

6. (c) subject to the High Court of Hong Kong not making an order the effect of which is to prohibit the offeror acquiring the remaining shares in the offer, the expiry of the period referred to in paragraph 6(d) above;

7. (d) subject to the scheme of arrangement referred to in paragraph 6(e) above becoming effective, the expiry of the period for exercising the Option as referred to in paragraph 6(e) above;

8. (e) subject to paragraph 6(f) above, the date of commencement of the winding up of the Company;

9. (f) the date on which the Grantee sells, transfers, charges, mortgages, encumbers or creates any interest in favour of any other person, over or in relation to any Option in breach of the Share Option Scheme;

10. (g) the date on which the Grantee, if an employee, ceases to be employee of the Group by reason of the termination of his or her employment on the grounds that he or she has been guilty of serious misconduct, or appears either to be unable to pay or to have no reasonable prospect of being able to pay his or her debts or has become bankrupt or has made any arrangement or composition with his or her

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SUMMARY OF THE PRINCIPAL TERMS OF THE PROPOSED SHARE OPTION SCHEME

APPENDIX

creditors generally or has been convicted of any criminal offence involving his or her integrity or honesty or on any other ground on which an employee would be entitled to terminate his or her employment summarily; or

• (h) unless the Board otherwise determines, the date the Grantee, if an employee, ceases to be an employee of the Group for any other reason.

• In the event of any alteration in the capital structure of the Company whilst any Option remains exercisable (whether such alteration arises by way of capitalisation of profits or reserves, rights issue, consolidation or sub-division of Shares or reduction of capital), the auditors of the Company shall determine what adjustment is required to the subscription price or the number of Shares to be issued on exercise of the Options provided that any such adjustments give the Grantee the same proportion of the equity capital of the Company.

• Any Options granted but not exercised may be cancelled if the Grantee so agrees and Options may be granted to the participant provided such Options fall within the limits specified in paragraph 3 above and are otherwise granted in accordance with the terms of the Share Option Scheme.

• The Shares issued on exercise of the Options will on issue be identical to the then existing issued Shares of the Company.

• The Company by ordinary resolution of Shareholders, or by resolution of the Board, may at any time terminate the operation of the Share Option Scheme and in such event no further Options will be offered or granted. Any unexercised Options shall continue to be exercisable in accordance with their terms of issue after the termination of the Share Option Scheme.

• The Options granted will be personal to the Grantees and are not transferable or assignable.

• Those specific provisions of the Share Option Scheme which relate to the matters set out in Rule 17.03 of the Listing Rules, or any change to the authority of the Directors or administrator of the Share Option Scheme in relation to any alteration of the terms, cannot be altered to the advantage of Participants or Grantees without the prior approval of Shareholders in general meeting. Any alterations to the terms and conditions of the Share Option Scheme which are of a material nature, or any change to the terms of 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 Share Option Scheme.

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SUMMARY OF THE PRINCIPAL TERMS OF THE PROPOSED SHARE OPTION SCHEME

APPENDIX

1. During the Option Period, and upon receipt of a notice to exercise Options, the Company may at its sole discretion (which discretion may or may not be exercised) and instead of issuing new Shares to the Participant, pay to the Grantee:—

2. (i) a refund of the subscription price received by the Company from the Participant with the notice of exercise of the Option; and

3. (ii) a cash compensation to be calculated by reference to the following formula:

   • (A X B) - C

where

• A is the number of Shares that would have been issued on exercise of the Option (the “Applicable Shares”);

• B is the average closing price of the Shares as stated in the daily quotations sheets issued by the Stock Exchange for the five business days immediately preceding the date the Company receives notice of exercise of the Option; and

• C is the aggregate Subscription Price for the Applicable Shares,

once the refund and cash compensation is made, the Grantee shall have no other claim against the Company and shall waive such claims with any Option so cancelled.

For the avoidance of doubt, no compensation will be paid if average closing price of the Shares as stated in the daily quotation sheets issued by the Stock Exchange for the five businesss days immediately preceding the date the Company receives notice of exercise of the Option is less than the Subscription Price for the Applicable Shares. Any payment made by the Company in accordance with this provision shall be charged to its retained profits or otherwise dealt with in accordance with applicable laws and the generally accepted principles in force at the time of such payment.

1. The Directors consider that it is not appropriate to state the value of all Options that can be granted under the Share Option Scheme as if they had been granted on the Latest Practicable Date as a number of variables which are crucial for the calculation of the Options 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.

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SUMMARY OF THE PRINCIPAL TERMS OF THE PROPOSED SHARE OPTION SCHEME

APPENDIX

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 the newspaper. 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 of the Company) for the approval of the company’s annual or interim results; and

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

and ending on the date of actual publication of the results announcement, no Option may be granted. The period during which no Option may be granted will cover any period of delay in the publication of a results announcement.

Present Status of the Share Option Scheme

The adoption of the Share Option Scheme is conditional on:—

• (a) the shareholders of the Company passing an ordinary resolution to the effect of that Numbered 1 in the notice of the Special General Meeting contained in this circular approving the Share Option Scheme; and

• (b) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Shares to be issued pursuant to any exercise of the Options.

If both of the above conditions are not satisfied on or before Monday, 10th June, 2002, the Existing Share Option Scheme will remain in force and Share Option Scheme shall not be adopted and no person shall be entitled to any rights or benefits or be under any obligations under or in respect of the Share Option Scheme.

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

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NOTICE OF SPECIAL GENERAL MEETING

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CHINA APOLLO HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

NOTICE IS HEREBY GIVEN that a Special General Meeting of China Apollo Holdings Limited (the “Company”) will be held at 10th Floor, Cammer Commercial Building, 30-32 Cameron Road, Tsimshatsui, Kowloon, Hong Kong on Friday, 17th May, 2002 at 10:00 a.m., for the purpose of considering and, if thought fit, passing the following resolutions the first of which will be proposed as an ordinary resolution, and the second as a special resolution:

ORDINARY RESOLUTION

1. “THAT , the existing employee share option scheme of the Company adoipted on 2nd December, 1995 be and is hereby terminated and the employee 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 hereof be and is hereby approved and adopted.”

SPECIAL RESOLUTION

1. “THAT , subject to the approval of the Registrar of Companies in Bermuda being obtained, the name of the Company be changed to “ MAXX Bioscience Holdings Limited ”

By order of the Board China Apollo Holdings Limited Lo Yuk Yee Chairman

23rd April, 2002

Notes:

1. Any member of the Company entitled to attend and vote at the meeting is entitled to appoint another person as his proxy to attend and vote instead of him. A member may appoint a proxy in respect of part only of his holding of shares in the Company. A proxy need not be a member of the Company.

2. A form of proxy for use at the meeting is enclosed herewith.

3. The instrument appointing a proxy must be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer, attorney or other person authorised to sign the same.

4. The instrument appointing a proxy and the 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 at the head office and principal place of business of the Company in Hong Kong at 10th Floor Cammer Commercial Building, 3032 Cameron Road, Tsimshatsui, Kowloon, Hong Kong not less than 48 hours before the time for holding the meeting or any adjournment thereof, in default of which the instrument of proxy shall not be treated as valid.

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