HKBN Ltd.

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

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

This circular appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

This circular does not constitute an offer to sell or the solicitation of an offer to buy any share or securities of the Company in the People’s Republic of China (excluding Hong Kong, the Macau Special Administrative Region or Taiwan) (the “PRC”) to any person to whom it is unlawful to make the offer or solicitation in the PRC.

The Amended Co-Ownership Plan IV does not, and is not intended to, constitute an offer within the meaning of the Macau Financial System Act. This circular and any other document or material in connection with the Amended Co-Ownership Plan IV, or invitation for subscription or purchase, have not been, and will not be, registered or subject to any approval in Macau and may not be circulated or distributed, nor may the RSUs be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Macau other than to an Eligible Talent.

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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香港寬頻有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1310)

(1) PROPOSED ADOPTION OF THE AMENDED AND RESTATED CO-OWNERSHIP PLAN IV;

(2) POTENTIAL GRANTS OF RSUS AND AWARD SHARES TO THE EXECUTIVE DIRECTORS OF THE COMPANY;

AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

A notice convening the EGM of the Company to be held at 10:00 a.m. on Friday, 28 April 2023, at Awesome Space, 14th Floor, Trans Asia Centre, 18 Kin Hong Street, Kwai Chung, New Territories, Hong Kong, is set out on pages 41 to 42 in this circular. Whether you are able to attend the EGM or not, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the office of the Company’s Hong Kong branch share registrar and transfer office, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting, or any adjournment thereof, should you so wish.

6 April 2023

		Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM	THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
APPENDIX I	– PRINCIPAL TERMS OF THE AMENDED AND
	RESTATED CO-OWNERSHIP PLAN IV . . . . . . . . . . .	26
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . .		41

This circular is published in both English and Chinese. Where the English and the Chinese texts conflict, the English text prevails.

– i –

DEFINITIONS

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

“Adoption Date”
19 August 2021, on which the Co-Ownership Plan IV was first adopted by the Board
“Amended Co-Ownership Plan the amended and restated restricted share unit scheme IV” proposed to be adopted by the Company, a summary of the principal terms of which is set out in Appendix I of this circular
“Amendment Date” the date on which the amendments and restatements of the Co-Ownership Plan IV become effective upon the satisfaction of the conditions as set out under the section headed “2. Proposed Adoption of the Amended CoOwnership Plan IV” in the “Letter from the Board” of this circular
“Announcement” has the meaning ascribed to it under the section headed “1. Introduction” in the “Letter from the Board” of this circular
“Annual Remuneration Package” with respect to an Eligible Talent, the higher of: (i) the total income reported by such Eligible Talent in his/her latest employee’s tax return of the Group Company filed with the local tax department or authority prior to the date of the relevant Invitation; and (ii) the basic monthly salary of such Eligible Talent as an employee of the Group as at the date of the relevant Invitation, multiplied by 12
“Articles” the second amended and restated memorandum and articles of association of the Company, as amended, supplemented or otherwise modified from time to time
“associate(s)” has the meaning ascribed to it in the Listing Rules
“Award Share(s)” new Share(s) which a Grantee becomes entitled to receive upon the vesting of an RSU (or a portion thereof)
“Bad Leaver” any leaver who is not a Good Leaver
“Board” the board of Directors from time to time or a duly authorised committee of the Board or such other committee as the Board may authorize

– 1 –

DEFINITIONS

“Business Day”
“Capital Expenditure”
“Co-Ownership Plan II”
“Co-Ownership Plan III Plus”
“Co-Ownership Plan IV”
“CO4 Qualifying Share(s)”
“CO4 Share(s)”
“Companies Law”
“Company”
“connected person(s)”
“core connected person(s)”

any day on which the Stock Exchange is open for the business of dealing in securities

cash payments to acquire property, plant and equipment and other long-term assets. These payments include those relating to capitalised development costs and exclude cost or expense relating to or arising from the investment in or acquisition of real property in respect of a Financial Year, calculated by reference to the annual report of the Company for such Financial Year
the restricted share unit scheme adopted by the Company on 21 February 2015, a summary of the principal terms of which is set out in the prospectus of the Company dated 27 February 2015
the restricted share unit scheme adopted by the Company and approved by the Shareholders at the extraordinary general meeting of the Company held on 19 August 2019
the restricted share unit scheme adopted by the Company and approved by the Shareholders at the extraordinary general meeting of the Company held on 15 October 2021
any Rollover Share(s) and any Purchased Share(s) under the Amended Co-Ownership Plan IV
any Share(s) held by or on behalf of any Talent pursuant to and in accordance with the terms of the Co-Ownership Plan IV immediately prior to the taking effect of the amendments and restatements on the Amendment Date
the Cayman Islands Companies Law, as amended, supplemented or otherwise modified from time to time
HKBN Ltd., a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Stock Exchange (stock code: 1310)
has the meaning ascribed to it in the Listing Rules
has the meaning ascribed to it in the Listing Rules

– 2 –

DEFINITIONS

“Current Investment Amount”
“Director”
“EBITDA”
“Eligible Talent(s)”
“Executive Director(s)”
“Extraordinary General Meeting” or “EGM”

the total investment value for the Rollover Shares of an Invitee determined according to the average closing price per Share based on the daily closing prices of the Shares as quoted on the Stock Exchange for the five (5) trading days immediately preceding the Amendment Date, as more particularly defined in paragraph 5(a) of Appendix I

a director of the Company

profit for the period plus finance costs, income tax expense, depreciation, amortisation of intangible assets (net of direct cost incurred in corresponding period), amortisation of customer acquisition and retention costs, other non-recurring item, share-based payment provision related to entitlements under any share incentive plan of the Company and less interest income in respect of a Financial Year, calculated by reference to the annual report of the Company for such Financial Year

(i) Talents who are existing participants of the CoOwnership Plan IV; (ii) an Executive Director; (iii) Talents of the Company or any member of the Group that is of point 3 grade or above and who has not given a notice of resignation to any member of the Group or who has not been given a notice of termination of employment by any member of the Group; and (iv) any individual who the Company reasonably contemplates would fall within class (iii), provided that his/her participation is conditional upon him/her falling within class (iii) during the relevant Invitation Period

an executive Director of the Company, being Mr. Chu Kwong YEUNG and Mr. Ni Quiaque LAI as at the Latest Practicable Date

the extraordinary general meeting of the Company to be convened at 10:00 a.m. on Friday, 28 April 2023, at Awesome Space, 14th Floor, Trans Asia Centre, 18 Kin Hong Street, Kwai Chung, New Territories, Hong Kong, notice of which is set out on pages 41 to 42 of this circular, including any postponement or adjournment thereof

– 3 –

DEFINITIONS

“Financial Year”

in respect of any calendar year, the Company’s financial year ending on 31 August of the relevant year, and

(i) “Financial Year 2023” shall mean the Company’s financial year ending on 31 August 2023;
(ii) “Financial Year 2024” shall mean the Company’s financial year ending on 31 August 2024; and
(iii) “Financial Year 2025” shall mean the Company’s financial year ending on 31 August 2025

“Good Leaver”

“Grant”

“Grant Date”

“Grantee”

a leaver who ceases to be employed or engaged by the Company or any Group Company, or ceases to be a Director or a director of any Group Company, by reason of: (i) death; (ii) retirement at or after the age of 60 or as required by the relevant local regulation; (iii) permanent ill health or physical or mental disability which renders him/her incapable of continued employment in his/her current position carrying out the normal duties for that position, as certified by a general medical practitioner, or other specialist medical professional; or (iv) who has been deemed by the Board as a Good Leaver according to the terms of the Amended Co-Ownership Plan IV

the grant of an RSU to the Participants under the Amended Co-Ownership Plan IV

a date on which RSUs are granted to any Grantee under the Amended Co-Ownership Plan IV by reference to the CO4 Qualifying Shares, which shall be as soon as practicable after the end of a Share Purchase Period following the end of an Invitation Period, and which shall be the same day as the date of the announcement issued by the Company of the Grants of RSUs under the Amended Co-Ownership Plan IV

any Participant to whom a Grant is made in accordance with the terms of the Amended Co-Ownership Plan IV or, where the context so permits, any person entitled to any such RSU in consequence of the death of the original Grantee as a Good Leaver or the legal personal representative of such person

– 4 –

DEFINITIONS

“Group”
“HK$”
“Hong Kong”
“Invitation”
“Invitation Period”
“Invitee”
“Latest Practicable Date”
“Listing Rules”
“M&A Event”

the Company and its subsidiaries and a “Group Company” means any of the aforesaid companies

Hong Kong dollars, the lawful currency of Hong Kong

the Hong Kong Special Administrative Region of the People’s Republic of China

an invitation by the Board to the Eligible Talents to participate in the Amended Co-Ownership Plan IV, as more particularly defined in paragraph 5(a) of Appendix I
(i) the period of 10 Business Days from the date of publication of the Company’s interim results for Financial Year 2023 and (ii) the period of 10 Business Days from the date of publication of the Company’s interim results for Financial Year 2024, or such other invitation period(s) as set by the Board in accordance with the terms of the Amended Co-Ownership Plan IV
an Eligible Talent who has been invited to participate in the Amended Co-Ownership Plan IV pursuant to an Invitation, as more particularly defined in paragraph 5(a) of Appendix I
31 March 2023, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information referred to in this circular
the Rules Governing the Listing of Securities on the Stock Exchange, as amended from time to time

any transaction by the Group which constitutes a “major transaction”, “very substantial acquisition” or “very substantial disposal” of the Company (such terms having the meaning given to them in Chapter 14 of the Listing Rules), whether or not such transaction involves any issuance of Shares, options or any convertible or exchangeable instruments that are convertible into Shares by the Company

– 5 –

DEFINITIONS

“M&A Termination Date”
the date of termination of the Amended Co-Ownership Plan IV as determined by the Board resulting from an M&A Event, as more particularly defined in paragraph 10(c) of Appendix I
“New Investment Amount”
an amount specified by an Invitee for the purchase of Shares under the Amended Co-ownership Plan IV, which represents an amount that such Invitee wishes to invest in the Shares, as more particularly defined in paragraph 5(a) of Appendix I
“Off-Market Purchased Share(s)”
Shares that have been purchased under the Amended Co-Ownership Plan IV through an off-market purchase, as more particularly defined in paragraph 5(b) of Appendix I
“On-Market Purchased Share(s)” Shares that have been purchased under the Amended Co-Ownership Plan IV through an on-market purchase, as more particularly defined in paragraph 5(b) of Appendix I
“Participant”
an Invitee who has accepted an Invitation and whose proposed rollover of the CO4 Shares and/or purchase of Shares has been accepted by the Board in accordance with the rules of the Amended Co-Ownership Plan IV and shall not include HKBN Talent CSI Fund Limited
“Plan Trustee”
the professional trustee of the Amended Co-Ownership Plan IV as appointed by the Company from time to time, being Computershare Hong Kong Trustees Limited as of the Latest Practicable Date
“Pricing Guidelines”
the pricing guidelines in accordance with which the Board shall direct the Plan Trustee to purchase Shares under the Amended Co-Ownership Plan IV, as more particularly defined in paragraph 5(b) of Appendix I
“Priority”
the priority for the allocation of the CO4 Qualifying Shares in the case of any over-subscription by the Participants, as more particularly defined in paragraph 5(c) of Appendix I

– 6 –

DEFINITIONS

“Proposed Grant(s)”
“Purchased Share(s)”
“Remuneration Committee”
“Rollover Share(s)”
“RSU”
“Scheme Mandate Limit”
“SFO”
“Share Purchase Period”
“Shareholder(s)”
the grant(s) and award(s) of an RSU and an Award Share to each of Mr. Chu Kwong YEUNG and Mr. Ni Quiaque LAI (being the Executive Directors) under the Amended Co-Ownership Plan IV
the On-Market Purchased Share(s) and/or the Off-Market Purchased Share(s)
the remuneration committee of the Board
the CO4 Share(s) elected by an Invitee to be subject to the terms and conditions of the Amended Co-Ownership Plan IV from the Amendment Date
a contingent right which entitles a Grantee to receive one Award Share (or portion thereof) to be awarded pursuant to the terms and conditions of the Amended CoOwnership Plan IV
the total maximum number of Shares that may underlie the RSUs to be granted pursuant to the Amended CoOwnership Plan IV, being 2.50% of the Shares in Issue (on a fully diluted and as-converted basis) on the day of the general meeting of the Company approving the amendments and restatements of the Amended CoOwnership Plan IV (as may be adjusted in the event of a subdivision or consolidation of the Shares)
Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
a reasonable period of time as is feasible for the Plan Trustee to purchase the requisite number of Shares under the Amended Co-Ownership Plan IV, as more particularly defined in paragraph 5(b) of Appendix I
holder(s) of Shares

– 7 –

DEFINITIONS

“Shares”

fully paid ordinary shares with a nominal value of HK$0.0001 each in the share capital of the Company or, if there has been a sub-division, reduction, consolidation, reclassification or reconstruction of the share capital of the Company, the shares forming part of the ordinary share capital of the Company of such nominal amount as shall result from any such sub-division, reduction, consolidation, reclassification or reconstruction

“Shares in Issue”
Shares that have been issued by the Company and Shares that are issuable by the Company pursuant to the exercise of convertible or exchangeable instruments or rights or option to subscribe for Shares that are in issue and outstanding as of the Latest Practicable Date, provided that no further consideration shall be payable by the holder of such instrument, right or option upon exercising such instrument, right or option (but excluding any RSUs granted under the Amended Co-Ownership Plan IV and any rights or options issued by the Company under any other employee incentive plan or scheme)
“Stock Exchange”
The Stock Exchange of Hong Kong Limited
“subsidiary” has the meaning ascribed to it in the Listing Rules
“Talent” an employee of the Group
“Term”
the term of the Amended Co-Ownership Plan IV, as more particularly defined in paragraph 4(b) of Appendix I
“Total Investment Amount”
the Current Investment Amount and the New Investment Amount (if any) for an Invitee in aggregate, as more particularly defined in paragraph 5(a) of Appendix I
“vest” with respect to a Grantee, the time when the Grantee becomes entitled to receive any Award Shares underlying the RSUs granted to him/her in accordance with the terms of the relevant RSUs and the Amended Co-Ownership Plan IV
“Vesting Conditions” the vesting conditions of the relevant portion of a RSU on each Vesting Date, as more particularly defined in paragraph 10(a) of Appendix I

– 8 –

DEFINITIONS

“Vesting Date” with respect to an RSU granted to a Grantee, a date on which any portion of the RSU vests upon the satisfaction of the relevant Vesting Conditions “%” per cent

– 9 –

LETTER FROM THE BOARD

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HKBN Ltd. 香港寬頻有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1310)

Board of Directors: Chairman and independent non-executive Director Mr. Bradley Jay HORWITZ

Executive Directors Mr. Chu Kwong YEUNG Mr. Ni Quiaque LAI

Non-executive Directors Mr. Agus TANDIONO Ms. Shengping YU Mr. Zubin Jamshed IRANI

Registered Office:

P.O. Box 309 Ugland House Grand Cayman KY1-1104 Cayman Islands

Principal Place of Business in Hong Kong:

12th Floor, Trans Asia Centre 18 Kin Hong Street, Kwai Chung New Territories Hong Kong

Independent non-executive Directors Ms. Edith Manling NGAN, MH Mr. Stanley CHOW Mr. Yee Kwan Quinn LAW, SBS, JP

Alternate Director

Mr. Hongfei YU (alternate to Ms. Shengping YU)

6 April 2023

To the Shareholders

Dear Sir or Madam,

(1) PROPOSED ADOPTION OF THE AMENDED AND RESTATED CO-OWNERSHIP PLAN IV; (2) POTENTIAL GRANTS OF RSUS AND AWARD SHARES TO THE EXECUTIVE DIRECTORS OF THE COMPANY;

AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

1. INTRODUCTION

The purpose of this circular is to provide you with information reasonably necessary to enable you to make a decision on whether to vote for or against the resolutions to be proposed at the Extraordinary General Meeting for the approval of, inter alia :

– 10 –

LETTER FROM THE BOARD

(a) the proposed amendments and restatements provided in, and the adoption of, the Amended Co-Ownership Plan IV (including the Scheme Mandate Limit for new Shares to be allotted and issued as Award Shares);
(b) the potential grants and awards of the RSUs and Award Shares to Mr. Chu Kwong YEUNG under the Amended Co-Ownership Plan IV; and
(c) the potential grants and awards of the RSUs and Award Shares to Mr. Ni Quiaque LAI under the Amended Co-Ownership Plan IV.

Reference is made to the announcement of the Company dated 19 January 2023 (the “ Announcement ”), in relation to, among other things, the proposed adoption of the Amended Co-Ownership Plan IV, and pursuant to the terms and conditions thereof, the potential grants and awards of the RSUs and Award Shares to each of Mr. Chu Kwong YEUNG and Mr. Ni Quiaque LAI, being the Executive Directors.

2. PROPOSED ADOPTION OF THE AMENDED CO-OWNERSHIP PLAN IV

The Board approved the conditional adoption of the Amended Co-Ownership Plan IV subject to obtaining the requisite approval of the Shareholders. A summary of the principal terms of the Amended Co-Ownership Plan IV is set out in Appendix I to this circular.

The effectiveness of the Amended Co-Ownership Plan IV on the Amendment Date is subject to the satisfaction of the following conditions:

(a) the passing of a resolution by the Shareholders at a general meeting to approve the adoption of the Amended Co-Ownership Plan IV (including the Scheme Mandate Limit provided therein); and
(b) the Listing Committee of the Stock Exchange granting or confirming the approval for the listing of, and permission to deal in, all the new Shares which may be allotted and issued under the Amended Co-Ownership Plan IV.

As at the Latest Practicable Date, the total number of issued Shares is 1,311,599,356, and the total number of Shares in Issue assuming the full conversion of certain vendor loan notes held by TPG Wireman, L.P. and Twin Holding Ltd is 1,478,921,568. If the Scheme Mandate Limit is utilised to the fullest extent and the maximum number of Award Shares underlying the RSUs is granted under the Amended Co-Ownership Plan IV, 36,973,039 new Shares will be issued under the Amended Co-Ownership Plan IV, which represents approximately 2.50% of the Shares in Issue, assuming no other Shares will be issued or repurchased by the Company from the Latest Practicable Date until the full utilisation of the Scheme Mandate Limit.

– 11 –

LETTER FROM THE BOARD

Application will be made by the Company to the Listing Committee of the Stock Exchange for the approval (or confirmation of the approval) for the listing of, and permission to deal in, all the new Shares which may be allotted and issued and may underlie the RSUs to be granted pursuant to the Amended Co-Ownership Plan IV.

The Plan Trustee is a third party independent from the Company and its connected persons. None of the Directors is the Plan Trustee, nor (to the knowledge of the Company) do they have any direct or indirect interest in the Plan Trustee.

3. PROPOSED GRANTS OF RSUS AND AWARD SHARES TO EACH EXECUTIVE DIRECTOR UNDER THE AMENDED CO-OWNERSHIP PLAN IV

As at the date of the Announcement, each of the Executive Directors has participated in the Co-Ownership Plan IV and has the following CO4 Shares held by the Plan Trustee on their behalf respectively under the Co-Ownership Plan IV:

			Maximum	Maximum
			entitlement for	entitlement for		Maximum
			CO4 Qualifying	CO4 Qualifying	Aggregate	entitlement for
			Shares (and	Shares (and	maximum	CO4 Qualifying
			therefore Award	therefore Award	entitlement for	Shares (and
			Shares) purchased	Shares) purchased	CO4 Qualifying	therefore Award
			with Current	with New	Shares (and	Shares) under the
			Investment	Investment	therefore Award	Amended Co-
			Amount under the	Amount under the	Shares) under the	Ownership Plan
			Amended Co-	Amended Co-	Amended Co-	IV as % to the
	Existing CO4		Ownership Plan	Ownership Plan	Ownership Plan	total issued
Name	Shares	(Note 1)	IV (Note 2)	IV (Note 3)	IV (Notes 2, 3 and 4)	Shares (Notes 2 and 3)
Mr. Chu Kwong	1,899,565		1,899,565	2,145,586	4,045,151	0.31%
YEUNG
Mr. Ni Quiaque	1,607,570		1,607,570	1,085,079	2,692,649	0.21%
LAI

Note 1: Held by the Plan Trustee on behalf of each of the Executive Directors.

Note 2: It is assumed that each of the Executive Directors confirms that he will continue to participate in the Amended Co-Ownership Plan IV and treat all of his above existing CO4 Shares as Rollover Shares.
Note 3: It is assumed that each of the Executive Directors confirms that he will provide New Investment Amount of up to his maximum entitlement.
Note 4: The maximum entitlement for the Award Shares is determined on a 1:1 basis with respect to the CO4 Qualifying Shares as one CO4 Qualifying Share will entitle a Participant to one RSU and one RSU will potentially entitle a Grantee to receive one Award Share under the Amended Co-Ownership Plan IV (assuming that all of the Vesting Conditions are satisfied).

The Proposed Grants to each of Mr. Chu Kwong YEUNG and Mr. Ni Quiaque LAI representing the above maximum entitlements mean that the Award Shares to be granted to each of the Executive Directors under the Amended Co-Ownership Plan IV will exceed 0.1% of the total issued Shares. Accordingly, a separate resolution will be presented to the Shareholders at the Extraordinary General Meeting to approve the above maximum entitlement to each of the Executive Directors.

– 12 –

LETTER FROM THE BOARD

Under the terms of the Amended Co-Ownership Plan IV, any Director who is a proposed Grantee or an existing Grantee or Participant shall abstain from voting on any resolution of the Board (or a committee thereof) in respect of all matters arising in relation to the Amended Co-Ownership Plan IV or its administration or implementation. Accordingly, Mr. Chu Kwong YEUNG and Mr. Ni Quiaque LAI have abstained from voting on the relevant board resolutions of the Company approving the proposed adoption of the Amended Co-Ownership Plan IV and the Proposed Grants.

Please note that the potential grants of RSUs and issue and allotment of Award Shares to each Executive Director would vary depending on the deviations from the assumptions stated above, provided that the number of Award Shares that underlies the RSUs that may be granted to each Executive Director under the Amended Co-Ownership Plan IV shall not exceed the maximum number that he is entitled to, as disclosed in the above table. Accordingly, information contained in the above table is only provided for illustrative purpose and has been presented on the basis of the stated assumptions.

4. REASONS FOR AND BENEFITS OF THE ADOPTION OF THE AMENDED CO-OWNERSHIP PLAN IV AND THE PROPOSED GRANTS OF RSUS AND AWARD SHARES TO THE EXECUTIVE DIRECTORS

a. Overview of the Group and the purpose of the Amended Co-Ownership Plan IV

The Company is an investment holding company. Headquartered in Hong Kong with operations spanning across Hong Kong, Macau, mainland China, Singapore and Malaysia, the Group is a leading integrated telecom and technology solutions provider. Operating through three core brands, namely Hong Kong Broadband Network, HKBN Enterprise Solutions and HKBN JOS, the Group offers a comprehensive range of solutions that include broadband, data connectivity, cloud and data centre, managed Wi-Fi, business continuity services, system integration, cybersecurity, mobile services, roaming solutions, digital solutions, voice and collaboration, stationery and supplies that are cumulative to its one-stop-shop offering of Transformation as a Service (TaaS) and Over-The-Top entertainment.

The Co-Ownership Plan IV was first adopted in 2021 to incentivise participating Talents to achieve a cumulative performance target over the 2022 to 2024 Financial Years of the Company. Due to macroeconomic downturn caused by the COVID-19 pandemic, and which was exacerbated by geopolitical tensions and rising interest rates, the Company has changed the company-wide performance targets from being based on adjusted free cash flow to focusing on earnings and revenue. Accordingly, the Company considers it appropriate to adjust the performance targets in the Co-Ownership Plan IV to better align the incentives of its Talents to the Company’s overall performance targets.

Accordingly, the Board proposed to adopt the Amended Co-Ownership Plan IV to (i) revise the performance targets for the vesting of the RSUs for participating Talents; (ii) extend the performance targets to cover the 2023 to 2025 Financial Years of the Company; and (iii) incorporate changes that are required by virtue of the amendments to Chapter 17 of the Listing Rules taking effect on 1 January 2023. Under the amended Chapter 17 of the Listing Rules, the Amended Co-Ownership Plan IV is a share scheme which falls within the ambit of the requirements of such chapter.

– 13 –

LETTER FROM THE BOARD

b. Key features of the Amended Co-Ownership Plan IV

The key amendments in the Amended Co-Ownership Plan IV are: (i) the basis for determining the performance targets will be changed to EBITDA and Capital Expenditure of the Company; (ii) the performance targets will be extended to cover the 2023 to 2025 Financial Years of the Company; (iii) the entitlements will be vested immediately on a yearly and pro-rated basis upon achieving the performance target for a particular Financial Year, instead of only in one lot at the end of the entire term; (iv) other than the performance targets, there will not be other Vesting Conditions; and (v) each participating Talent under the Co-Ownership Plan IV could choose to take back the Shares that were purchased on his/her behalf and terminate participation in the plan or continue to participate in the Amended Co-Ownership Plan IV and continue to have the Shares that were purchased on his/her behalf to be subject to the terms and conditions of the Amended Co-Ownership Plan IV. Other proposed key amendments are for the purpose of compliance with the amended Chapter 17 of the Listing Rules which came into effect on 1 January 2023.

The following paragraphs set out the key features of the Amended Co-Ownership Plan IV (as compared to the Co-Ownership Plan IV). For more details of the principal terms of the Amended Co-Ownership Plan IV, please refer to Appendix I to this circular.

Proposed term of approximately five years: The term of the Amended CoOwnership Plan IV will be extended to five years from the Adoption Date, which will incentivise Participants to achieve the performance targets of EBITDA and Capital Expenditure of the Company over each of the Financial Years 2023, 2024 and 2025.
Eligible participants: Eligible Talents who are eligible to participate in the Amended Co-Ownership Plan IV, namely: (i) Talents who are existing participants of the Co-Ownership Plan IV; (ii) the Executive Directors; (iii) Talents of the Company or any member of the Group that is of point 3 grade or above and who has not given a notice of resignation to any member of the Group or who has not been given a notice of termination of employment by any member of the Group; and (iv) any individual who the Company reasonably contemplates would fall within class (iii) above, provided that his/her participation is conditional upon him/her falling within class (iii) above during the relevant Invitation Period. As at the Latest Practicable Date, there are approximately 1,995 Eligible Talents, representing approximately 40% of the total number of existing Talents of the Group. HKBN Talent CSI Fund Limited (which is a charitable fund) which was a participant under the Co-Ownership Plan IV will cease to be a Participant in the Amended Co-Ownership Plan IV as it is not eligible to participate in such plan according to the requirements of the amended Chapter 17 of the Listing Rules. All Participants are directors or employees of the Group.

– 14 –

LETTER FROM THE BOARD

Qualifying shares of Eligible Talents: An existing participant under the CoOwnership Plan IV (who is an Eligible Talent) may choose to continue to participate in the Amended Co-Ownership Plan IV and continue to have all or any portion of the Shares that were purchased on his/her behalf under the Co-Ownership Plan IV to be subject to the terms and conditions of the Amended Co-Ownership Plan IV (namely, the “ Rollover Shares ”). In addition, an Eligible Talent may also make new investment in the Shares by purchasing additional Shares under the Amended Co-Ownership Plan IV. Accordingly, the CO4 Qualifying Shares will comprise: (i) any Rollover Shares of an existing participant of the Co-Ownership Plan IV; and (ii) the Shares to be purchased for and on behalf of an Eligible Talent under the Amended Co-Ownership Plan IV. If an existing participant under the Co-Ownership Plan IV elects to rollover only a portion of (or none of) the existing Shares that were purchased on his/her behalf under the Co-Ownership Plan IV, such participant will not be entitled to purchase any additional Shares under the Amended Co-Ownership Plan IV.

The Total Investment Amount of an Eligible Talent comprising of (i) the Current Investment Amount of his/her Rollover Shares (determined according to the average closing price per Share based on the daily closing prices of the Shares as quoted on the Stock Exchange for the five (5) trading days immediately preceding the Amendment Date) together with (ii) the New Investment Amount which such Eligible Talent will pay for making purchases of additional Shares under the Amended Co-Ownership Plan IV (in each case, if any), must in aggregate be: (A) equal to or exceed one-sixth (1/6th) of the Annual Remuneration Package of such Eligible Talent; and (B) not more than two times of the Annual Remuneration Package of such Eligible Talent. However, if an Eligible Talent who is an existing participant under the Co-Ownership Plan IV elects to rollover all (but not only a portion) of the existing Shares that were purchased on his/her behalf under the Co-Ownership Plan IV (and not all of such Shares), such Eligible Talent shall not be subject to the minimum investment amount requirement as set forth in (A) above.

Under the Co-Ownership Plan IV, there are 11,825,262 CO4 Shares held by the Plan Trustee on behalf of the existing participants, which represent approximately 0.90% of the issued share capital of the Company as at the Latest Practicable Date.

Invitation Periods: There may be up to two Invitation Periods during which the Company may invite Eligible Talents to participate in the Amended Co-Ownership Plan IV as determined by the Board. In the first invitation period, Eligible Talents, including the existing participants in the Co-Ownership Plan IV, will be invited to consider (i) (if they are existing participants under the Co-Ownership Plan IV) whether to elect to have Rollover Shares continue to be subject to the Amended Co-Ownership Plan IV; and/or (ii) whether to make new investment in the Shares by purchasing additional Shares under the Amended Co-Ownership Plan IV. In the second invitation period, any newly joined Eligible Talents or newly qualified Eligible Talents will be invited to make investment in the Shares by purchasing

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LETTER FROM THE BOARD

Shares under the Amended Co-Ownership Plan IV. The Invitation Period shall be a period of 10 Business Days from the date of publication of the interim results announcement by the Company for the Financial Year 2023 and the Financial Year 2024 respectively.

Acceptance of enrolment and participation: The Board may, by an acceptance notice, accept an Eligible Talent’s enrolment and participation in the Amended Co-Ownership Plan IV and his/her instructions to (i) (if he/she has such CO4 Shares held on his/her behalf prior to the Amendment Date) confirm that all or (if so specified) such part of his/her CO4 Shares shall continue to be subject to the Amended Co-Ownership Plan IV as Rollover Shares and/or (ii) purchase Shares under the Amended Co-Ownership Plan IV as specified by such Eligible Talent and will require the Eligible Talent to, in each case within 10 Business Days after the date of the acceptance notice, (i) transfer the legal title to the Rollover Shares to the Plan Trustee (to the extent not already held by the Plan Trustee) and/or (ii) remit the New Investment Amount to the Plan Trustee through the Company.
Over-subscription of the Shares: If the total number of Rollover Shares of all Participants for the time being and the total intended New Investment Amounts of all Participants shall result in the total number of CO4 Qualifying Shares exceeding the maximum number of Award Shares that may underlie the RSUs granted pursuant to the Amended Co-Ownership Plan IV according to the Scheme Mandate Limit, the allocation of the CO4 Qualifying Shares shall be determined according to the following priority:
(i) first, to satisfy the total number of Rollover Shares of all existing participants of the Co-Ownership Plan IV (including the Executive Directors);
(ii) second, to satisfy the New Investment Amounts of all existing participants of the Co-Ownership Plan IV (excluding the Executive Directors) for purchasing additional Shares for up to one-quarter (1/4th) of the Annual Remuneration Package of each such participant, and the entitlement of each such participant shall be determined on a pro-rata basis as amongst all such participants;
(iii) third, to satisfy the New Investment Amounts of Participants (excluding the Executive Directors) who have become Eligible Talents on or after 15 November 2021 for up to one time of the Annual Remuneration Package of each such Participant, and the entitlement of each such Participant shall be determined on a pro-rata basis as amongst all such Participants;
(iv) fourth, to satisfy the remaining demand of all Participants (excluding the Executive Directors), and the entitlement of each such Participant shall be determined on a pro-rata basis as amongst all such Participants; and

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LETTER FROM THE BOARD

(v) fifth, to satisfy the New Investment Amounts of the Executive Directors on a pro-rata basis as amongst them.
Basis for determining number of RSUs: Each Participant will be granted one RSU for each CO4 Qualifying Share that is held on his/her behalf by the Plan Trustee. On each Vesting Date and upon satisfaction of the relevant Vesting Conditions, one (or a portion of) RSU entitles the Grantee to receive one (or the same portion of) Award Share.
RSU grant date: RSUs will be granted to the Participants at the end of the Share Purchase Period for purchasing Shares by utilising the New Investment Amounts of the Participants under the Amended Co-Ownership Plan IV. By the end of each such Share Purchase Period, there will be certainty as to the total number of CO4 Qualifying Shares. As of the Latest Practicable Date, no RSUs have been granted under the Co-Ownership Plan IV, and none is expected to be granted before the Amended Co-Ownership Plan IV is to be approved by the Shareholders in the Extraordinary General Meeting.
Scheme Mandate Limit: The total maximum number of Award Shares that may underlie the RSUs to be granted pursuant to the Amended Co-Ownership Plan IV is 2.50% of the Shares in Issue (on a fully diluted and as-converted basis) on the day of the Extraordinary General Meeting (as may be adjusted in the event of a subdivision or consolidation of the Shares).

As at the Latest Practicable Date, the total number of issued Shares is 1,311,599,356, and the total number of the Shares in Issue assuming the full conversion of certain vendor loan notes held by TPG Wireman, L.P. and Twin Holding Ltd is 1,478,921,568. If the Scheme Mandate Limit is utilised to the fullest extent and the maximum number of Award Shares underlying the RSUs is granted under the Amended Co-Ownership Plan IV, 36,973,039 new Shares will be issued under the Amended Co-Ownership Plan IV, assuming no other Shares will be issued or repurchased by the Company from the Latest Practicable Date until the full utilisation of the Scheme Mandate Limit.

As at the Latest Practicable Date, the outstanding share schemes of the Company are the Co-Ownership Plan II, the Co-Ownership Plan III Plus and the Co-Ownership Plan IV. Assuming that 36,973,039 new Shares will be issued under the Amended Co-Ownership Plan IV, the total number of shares which may be issued under the Co-Ownership Plan II, the Co-Ownership Plan III Plus and the Amended CoOwnership Plan IV does not exceed 10% of the total number of Shares in issue as at the Extraordinary General Meeting. In case the Company seeks approval of the Shareholders in a general meeting for refreshing the Scheme Mandate Limit under the Amended Co-Ownership Plan IV after three years from the date of the Extraordinary General Meeting, the total number of shares which may be issued under all of the schemes of the Company (including the Amended Co-Ownership Plan IV) must not exceed 10% of the Shares in issue as at the date of approval of the refreshed scheme mandate.

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LETTER FROM THE BOARD

Vesting of the RSUs and issuance of the Award Shares: On the basis that the CO4 Qualifying Shares of the Grantees are continued to be held by the Plan Trustee until a Vesting Date, vesting of RSUs granted to each Grantee should occur on each of the following Vesting Dates upon the satisfaction of the corresponding Vesting Conditions:

			Portion of an RSU becoming
Vesting Date	Vesting Conditions		vested
The date	(1)	EBITDA for Financial	0.15 (or 15%)
which is 12		Year 2023 is not less than
months from		HK$2,615,000,000; and
the Grant
Date after the	(2)	Capital Expenditure for
first Invitation		Financial Year 2023 is
Period		not more than
		HK$550,000,000
The date	(1)	EBITDA for Financial	0.35 (or 35%)
within 10		Year 2024 is not less than
Business		HK$2,746,000,000; and
Days from the
date of	(2)	Capital Expenditure for
publication		Financial Years 2023 and
of the		2024 in aggregate is not
Company’s		more than
annual results		HK$1,100,000,000
for Financial
Year 2024
The date	(1)	EBITDA for Financial	A = 0.5 x (B –
within 10		Year 2025 is not less than	HK$2,801,000,000)/C
Business		HK$2,801,000,000 (being
Days from the		a compound annual	A – the portion of an RSU
date of		growth rate of	becoming vested
publication		approximately 3.5% from
of the		the EBITDA target of	B – actual EBITDA for
Company’s		HK$2,615,000,000 for	Financial Year 2025 and
annual results		Financial Year 2023); and	capped at HK$2,883,000,000
for Financial
Year 2025	(2)	Capital Expenditure for	C – equals to HK$82,000,000,
		Financial Years 2023,	which is the difference of
		2024 and 2025 in	HK$2,883,000,000 and
		aggregate is not more	HK$2,801,000,000
		than HK$1,650,000,000

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LETTER FROM THE BOARD

On each Vesting Date and upon the satisfaction of the relevant Vesting Conditions, the Company shall allot and issue the relevant Award Shares to the Grantees (on the basis of one Award Share for every RSU granted and vested). The total number of Award Shares that are issuable to the Participants under the granted RSUs shall not exceed the Scheme Mandate Limit.

The Amended Co-Ownership Plan IV may be terminated earlier on the date which the Board in its absolute discretion resolves that none of the Vesting Conditions is able to be achieved. In this case, the Purchased Shares will be returned to the Participants.

Early termination due to an M&A Event: The Board has the discretion to terminate the Amended Co-Ownership Plan IV on the occurrence of an M&A Event, as the M&A Event may have a material impact on the Company, and accordingly the ability of the Company to meet the specified EBITDA and Capital Expenditure performance targets. If the Board resolves to early terminate the Amended Co-Ownership Plan IV, the Board shall have absolute discretion to waive (or not to waive) any or all Vesting Conditions and determine the number or proportion of RSUs to be otherwise vested and any RSU (or any portion thereof) for which the Board determines not to be vested shall lapse on the M&A Termination Date. For the avoidance of doubt, upon the occurrence of an M&A Event, the Board may decide to allow the Amended Co-Ownership Plan IV to continue without any changes to the Vesting Conditions.

In determining whether to waive (or not to waive) any or all Vesting Conditions and the number or proportion of RSUs to be vested (or not to be vested), the Board will duly and carefully consider a number of factors, including but not limited to, the nature of the M&A Event and how it may affect the ability of the Company to satisfy the Vesting Conditions, the time proximity between the M&A Event and the Vesting Date, the Company’s then business development plans, the market conditions, the impacts on the Grantees resulting from the M&A Event, the benefits of the Company and the interests of the Shareholders as a whole, as well as recommendations from the Remuneration Committee. In any event, the total numbers of Award Shares that underlie the RSUs shall not exceed the Scheme Mandate Limit.

In case the Board resolves to early terminate the Amended Co-Ownership Plan IV and/or waive any or all Vesting Conditions, the vesting period for RSUs granted to each Grantee may be less than 12 months.

According to Appendix 14 to the Listing Rules, the Remuneration Committee is required to review and/or approve matters relating to the Amended Co-Ownership Plan IV. With respect to the Amended Co-Ownership Plan IV, the duties of the Remuneration Committee include (i) reviewing and approving the adoption of the Amended Co-Ownership Plan IV and the scheme rules of the Amended Co-Ownership Plan IV; (ii) reviewing and approving the scope of the Eligible Talents (including the Executive Directors and the eligible talents of the Company or any member of the Group); (iii) reviewing and approving the proposed Grants to the Executive Directors and other Eligible Talents; (iv) ensuring that any Grants to the Executive Directors and other Eligible Talents are in accordance with Chapter 17 of the Listing Rules; (v) reviewing and approving any change to the terms of RSUs granted to a Grantee in

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LETTER FROM THE BOARD

accordance with the scheme rules of the Amended Co-Ownership Plan IV; and (vi) making recommendations to the Board in relation to any of the matters set out in the foregoing sub-paragraphs (i) to (v). In carrying out such duties, the Remuneration Committee shall consider, including but not limited to, (i) the general corporate goals and objectives of the Company, (ii) the remuneration packages of other comparable companies and the remuneration packages needed to attract, retain and motivate the Executive Directors and (iii) the contributions or potential contributions made or to be made by the Eligible Talents to the development and growth of the Group.

As Mr. Chu Kwong YEUNG is an Eligible Talent and a potential Grantee under the Amended Co-Ownership Plan IV, Mr. Chu Kwong YEUNG has abstained from voting on the relevant resolutions of the Remuneration Committee approving the proposed adoption of the Amended Co-Ownership Plan IV and the Proposed Grants. Mr. Chu Kwong YEUNG resigned as a member of the Remuneration Committee on 20 February 2023 due to pursuance of higher independence in the Remuneration Committee. After resignation, the Remuneration Committee comprises one non-executive Director and three independent non-executive Directors. As such, none of the Eligible Talents is a member of the Remuneration Committee. Please refer to the announcement of the Company dated 20 February 2023 for details.

Under the terms of the Amended Co-Ownership Plan IV, any Director who is a proposed grantee or an existing grantee or participant shall abstain from voting on any resolution of the Board (or a committee thereof) in respect of all matters arising in relation to the Amended Co-Ownership Plan IV or its administration or implementation. Accordingly, Mr. Chu Kwong YEUNG and Mr. Ni Quiaque LAI have abstained from voting on the relevant board resolutions of the Company approving the proposed adoption of the Amended Co-Ownership Plan IV and the Proposed Grants.

5. IMPLICATIONS UNDER THE LISTING RULES

a. Proposed adoption of the Amended Co-Ownership Plan IV

The Amended Co-Ownership Plan IV constitutes a share scheme under the amended Chapter 17 of the Listing Rules which came into effect on 1 January 2023. Accordingly, the adoption of the Amended Co-Ownership Plan IV will, according to Rule 17.02(1) of the Listing Rules, require the approval of the Shareholders in general meeting.

b. Proposed Grants of RSUs and Award Shares to each Executive Director

Pursuant to Rule 17.04(1) of the Listing Rules and the terms of the Amended Co-Ownership Plan IV, any Grant to a Director, a chief executive or a substantial shareholder of the Company, or any of their respective associates, shall be subject to the prior approval of the independent non-executive Directors. Accordingly, the Proposed Grants to each of Mr. Chu Kwong YEUNG and Mr. Ni Quiaque LAI, being the Executive Directors, have been approved by the independent non-executive Directors.

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LETTER FROM THE BOARD

As the possible maximum grants of RSUs and Award Shares to each of the Executive Directors under the Amended Co-Ownership Plan IV are expected to exceed 0.1% of the total issued Shares, as required under Rule 17.04(2) of the amended Listing Rules, a separate resolution will be presented to the Extraordinary General Meeting to approve the maximum entitlement to each of Mr. Chu Kwong YEUNG and Mr. Ni Quiaque LAI under the Proposed Grants.

c. Directors’ views

The Directors are of the view that the terms of the Amended Co-Ownership Plan IV are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

The Directors (including the independent non-executive Directors but excluding Mr. Chu Kwong YEUNG and Mr. Ni Quiaque LAI who have abstained from voting on the board resolutions approving the proposed adoption of the Amended Co-Ownership Plan IV and the Proposed Grants) are of the view that the Proposed Grants are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

As the Executive Directors are Eligible Talents and potential Grantees under the Amended Co-Ownership Plan IV, Mr. Chu Kwong YEUNG and Mr. Ni Quiaque LAI have abstained from voting on the relevant board resolutions of the Company approving the proposed adoption of the Amended Co-Ownership Plan IV and the Proposed Grants.

d. Extraordinary General Meeting

The effectiveness of the Amended Co-Ownership Plan IV is subject to (i) the approval of the adoption of the Amended Co-Ownership Plan IV by the Shareholders at the Extraordinary General Meeting; and (ii) the grant (or confirmation) of the approval by the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the new Shares underlying the RSUs which may be allotted and issued pursuant to the Amended Co-Ownership Plan IV (being the Scheme Mandate Limit). The Proposed Grants to each of Mr. Chu Kwong YEUNG and Mr. Ni Quiaque LAI are subject to the approval by the Shareholders at the Extraordinary General Meeting.

Under the Co-Ownership Plan IV, the Plan Trustee holds, as at the Latest Practicable Date, a total of 11,825,262 Shares on behalf of the participants under the Co-Ownership Plan IV, representing approximately 0.90% of the total issued share capital of the Company as at the Latest Practicable Date. Pursuant to the existing scheme rules of the Co-Ownership Plan IV, the Plan Trustee is restricted from exercising the voting rights attached to the aforesaid total number of 11,825,262 Shares.

So far as the Company is aware, other than the Plan Trustee, the Executive Directors and the Eligible Talents (including the existing participants under the Co-Ownership Plan IV) who are Shareholders and are required to abstain from voting on the resolutions approving the adoption of the Amended Co-Ownership Plan IV to be proposed at the Extraordinary General

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LETTER FROM THE BOARD

Meeting, as they may be considered to be materially interested in the adoption of the Amended Co-Ownership Plan IV, no other Shareholders are required to abstain from voting on the resolutions in respect of the adoption of the Amended Co-Ownership Plan IV to be proposed at the Extraordinary General Meeting.

So far as the Company is aware, other than the Executive Directors and the core connected persons who are Shareholders and are required to abstain from voting on the resolution approving the Proposed Grants to be proposed at the Extraordinary General Meeting, as they may be considered to be materially interested in the Proposed Grants under the Amended Co-Ownership Plan IV, no other Shareholders are required to abstain from voting on the resolutions in respect of the Proposed Grants to be proposed at the Extraordinary General Meeting.

Based on the knowledge and information of the Company as at the Latest Practicable Date, (i) Mr. Chu Kwong YEUNG is interested in a total of 28,155,992 Shares (among which 1,899,565 Shares are held by the Plan Trustee on his behalf pursuant to the Co-Ownership Plan IV); (ii) Mr. Ni Quiaque LAI is interested in a total of 32,604,692 Shares (among which 1,607,570 Shares are held by the Plan Trustee on his behalf pursuant to the Co-Ownership Plan IV); and (iii) the Eligible Talents (including the Executive Directors and the other existing participants of the Co-Ownership Plan IV) are interested in a total of 71,339,060 Shares (among which 11,825,262 Shares are held by the Plan Trustee on their behalf).

As the total number of 57,253,549 Shares (representing approximately 4.37% of the total issued share capital of the Company as at the Latest Practicable Date) represents Shares in which, to the Company’s knowledge and information, the Executive Directors are interested respectively, each of them is required to abstain from voting with respect to such Shares on the resolutions concerning the adoption of the Amended Co-Ownership Plan IV and the Proposed Grants at the Extraordinary General Meeting. In addition, based on the knowledge and information of the Company as at the Latest Practicable Date, (i) the core connected persons of the Company (including the Executive Directors) are interested in a total of 59,513,798 Shares (representing approximately 4.54% of the total issued share capital of the Company as at the Latest Practicable Date) and they are required to abstain from voting with respect to their respective Shares on the resolutions concerning the adoption of the Amended Co-Ownership Plan IV and the Proposed Grants, and (ii) the Company is not aware of any associates of the Executive Directors being the Shareholders and being required to abstain from voting at the Extraordinary General Meeting. As mentioned above, 11,825,262 Shares are held by the Plan Trustee on behalf of the participants under the Co-Ownership Plan IV (including the Executive Directors) pursuant to the Co-Ownership Plan IV (representing approximately 0.90% of the total issued share capital of the Company as at the Latest Practicable Date), the Plan Trustee will not vote on all of the resolutions to be presented at the Extraordinary General Meeting as it is restricted from exercising the voting rights attached to such Shares.

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LETTER FROM THE BOARD

6. RECOMMENDATIONS

The Directors are of the view that the terms of the Amended Co-Ownership Plan IV are fair and reasonable and in the interests of the Company and its Shareholders as a whole and in the ordinary and usual course of business of the Group and on normal commercial terms and therefore recommend that the Shareholders vote in favour of the resolution numbered 1 to be proposed at the Extraordinary General Meeting.

The Directors (including the independent non-executive Directors and excluding Mr. Chu Kwong YEUNG and Mr. Ni Quiaque LAI who have abstained from voting on the board resolutions approving the adoption of the Amended Co-Ownership Plan IV and the Proposed Grants) are of the view that the Proposed Grants are fair and reasonable and in the interests of the Company and its Shareholders as a whole and in the ordinary and usual course of business of the Group and on normal commercial terms and therefore recommend that the Shareholders vote in favour of the resolutions numbered 2 and 3 to be proposed at the Extraordinary General Meeting.

WARNING: The information set out in this circular relating to the Amended Co-Ownership Plan IV, including the proposed bases for determining whether the respective conditions for the granting and vesting of the RSUs are satisfied, are for the purpose of considering the resolutions to be presented at the Extraordinary General Meeting only. Nothing in this circular shall represent a forecast or projection of the Company’s share price, future performance, cash flow or profitability. As the adoption of the Amended Co-Ownership Plan IV is subject to approval by the Shareholders, the Amended Co-Ownership Plan IV may or may not be implemented and such bases for granting and vesting may or may not materialise. Accordingly, Shareholders and potential investors of the Company should exercise caution when dealing in the securities of the Company.

7. ACTION TO BE TAKEN

A form of proxy at the Extraordinary General Meeting is enclosed herewith. Whether or not you intend to attend the Extraordinary General Meeting, you are requested to complete the form of proxy and return it to the office of the Company’s Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited at 17M 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 Extraordinary General Meeting or any adjournment thereof. Completion and return of a form of proxy will not preclude you from attending and voting in person at the Extraordinary General Meeting, or any adjournment thereof, should you so wish.

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LETTER FROM THE BOARD

8. EXTRAORDINARY GENERAL MEETING

Notice of the Extraordinary General Meeting is set out on pages 41 to 42 of this circular. The Extraordinary General Meeting to be held on Friday, 28 April 2023, at 10:00 a.m. is for the purpose of considering and, if thought fit, passing the resolutions set out therein.

According to Rule 13.39(4) of the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll. Therefore, all the resolutions put to vote at the Extraordinary General Meeting will be taken by way of poll.

Please refer to section 5(c) of this “Letter from the Board” for details on the number of Shares with which the holders thereof will be required to abstain from voting or will be restricted from voting (as the case may be) on the relevant resolutions put to vote at the Extraordinary General Meeting.

Shareholders who wish to attend the EGM and exercise their voting rights can be achieved in one of the following ways:

(1) attend the EGM in person and vote at the EGM venue; or
(2) appoint the chairman of the EGM or other persons as your proxy to vote on your behalf.

Your proxy’s authority and instruction will be revoked if you attend and vote in person at the EGM.

If you are a non-registered shareholder, you may instruct your banks, brokers or other custodians to appoint a proxy to attend and vote at the EGM on your behalf if you wish.

To uphold a high hygiene standard, protect the health of shareholders and prevent the wide-spreading of diseases, no food or drink will be served at the EGM.

If Shareholders have any questions relating to the EGM, please contact Computershare Hong Kong Investor Services Limited, the Hong Kong branch share registrar and transfer office of the Company, as follows:

Computershare Hong Kong Investor Services Limited

17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong Telephone: +852 2862 8555 Facsimile: +852 2865 0990 Enquiries: www.computershare.com/hk/en/online_feedback

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LETTER FROM THE BOARD

9. 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 herein or this circular misleading.

10. DOCUMENT ON DISPLAY

The full terms of the Amended Co-Ownership Plan IV will be published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.hkbnltd.net) for a period of not less than 14 days before the date of the Extraordinary General Meeting and the rules of the Amended Co-Ownership Plan IV will be made available for inspection at the Extraordinary General Meeting.

Yours faithfully, For and on behalf of HKBN Ltd. Bradley Jay HORWITZ Chairman

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PRINCIPAL TERMS OF THE AMENDED AND RESTATED CO-OWNERSHIP PLAN IV

APPENDIX I

The following is a summary of the principal terms of the Amended Co-Ownership Plan IV proposed to be approved at the Extraordinary General Meeting but does not form part of, nor is it intended to be, part of the Amended Co-Ownership Plan IV nor should it be taken as affecting the interpretation of the Amended Co-Ownership Plan IV.

1. PURPOSE OF THE AMENDED CO-OWNERSHIP PLAN IV

The purposes of the Amended Co-Ownership Plan IV are to (i) incentivise skilled and experienced Talents to remain with the Group and to motivate them to strive for the future development and expansion of the Group in the post COVID-19 time in order to create value to the Shareholders, by providing them with a co-investment opportunity to acquire equity interests in the Company, while encouraging them to be long term holders of the Shares; and (ii) adjust the basis upon which Award Shares will be granted under the Amended Co-Ownership Plan IV by reference to the changing business environment and circumstances of the Company and the changing performance targets of the Company.

2. RESTRICTED SHARE UNITS

An RSU is a contingent right which entitles a Grantee to receive one Award Share (or portion thereof) to be awarded pursuant to the terms and conditions of the Amended Co-Ownership Plan IV.

3. PARTICIPANTS OF THE AMENDED CO-OWNERSHIP PLAN IV AND BASIS FOR DETERMINING THE ELIGIBILITY OF THE PARTICIPANTS

The Board will grant RSUs pursuant to the Amended Co-Ownership Plan IV to Participants upon the satisfaction of conditions set out in the terms of the Amended Co-Ownership Plan IV. The Eligible Talent who is entitled to participate in the Amended Co-Ownership Plan IV include: (i) Talents who are existing participants of the Co-Ownership Plan IV, (ii) any Executive Director, (iii) any Talent of the Company or any member of the Group that is of point 3 grade (supervisory level or equivalent) or above and who has not given a notice of resignation to any member of the Group, and (iv) any individual who the Company reasonably contemplates would fall within class (iii) (provided that his/her participation is conditional upon him/her falling within class (iii) during the relevant Invitation Period). An Eligible Talent will receive an Invitation from the Board during the relevant Invitation Period, and such person will become a Participant upon the acceptance of an Invitation to participate in the Amended Co-Ownership Plan IV in accordance with paragraph 5(a) below.

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PRINCIPAL TERMS OF THE AMENDED AND RESTATED CO-OWNERSHIP PLAN IV

APPENDIX I

4. STATUS OF THE AMENDED CO-OWNERSHIP PLAN IV

(a) Conditions of the Amended Co-Ownership Plan IV

The adoption of the Amended Co-Ownership Plan IV will take effect subject to (i) obtaining the requisite approval by the Shareholders at a general meeting of the Company of the terms and conditions of the Amended Co-Ownership Plan IV and the proposed allotment and issuance of new Shares underlying the RSUs by the Company; and (ii) the Listing Committee of the Stock Exchange granting or confirming approval for the listing of, and permission to deal in, the new Shares underlying the RSUs which may be granted pursuant to the Amended Co-Ownership Plan IV.

(b) Term of the Amended Co-Ownership Plan IV

Subject to the conditions as set out in paragraph 4(a) above being satisfied, the Amended Co-Ownership Plan IV shall be valid and effective for the period commencing on the Amendment Date and expiring on the earliest of (i) the date falling five (5) years from the Adoption Date; (ii) the M&A Termination Date; (iii) the date of termination of the Amended Co-Ownership Plan IV as determined by the Board in the case where the Board in its absolute discretion resolves that none of the Vesting Conditions is able to be achieved; (iv) the date of termination of the Amended Co-Ownership Plan IV as determined by the Board in the case where the Board in its absolute discretion resolves that the Amended Co-Ownership Plan IV shall be terminated upon the occurrence of any corporate event as described in paragraph 11 below; and (v) the termination of the Amended Co-Ownership Plan IV in accordance with paragraph 15 below (such period being the “ Term ”), after which period no further RSUs shall be offered or granted but the provisions of the Amended Co-Ownership Plan IV shall remain in full force and effect in all other respects with respect to the vesting and lapse of any RSU granted and that remains outstanding.

5. ROLLOVER AND PURCHASE OF SHARES AND GRANT OF RSUS

(a) Invitation to participate in the Amended Co-Ownership Plan IV

The Board may, within each of the Invitation Periods, invite (i) any Eligible Talent who, as at the start of each applicable Invitation Period, has not been previously invited to, after the Amendment Date, participate in the Amended Co-Ownership Plan IV (including, for the avoidance of doubt, any individual who has joined the Group as an Eligible Talent, or has been promoted and has become an Eligible Talent, prior to the start of any Invitation Period, or is reasonably contemplated by the Company to become an Eligible Talent during the relevant Invitation Period) (each, an “ Invitee ”) to enrol and participate in the Amended Co-Ownership Plan IV by way of (i) confirming that his/her CO4 Shares (if he/she has such CO4 Shares held on his/her behalf prior to the Amendment Date) shall continue to be subject to the Amended Co-Ownership Plan IV as Rollover Shares (on a one-to-one share basis) and/or (ii) purchasing Shares (together, an “ Invitation ”) in accordance with the terms of the Amended Co-Ownership Plan IV.

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To the extent that any Invitation Period has to be shortened or suspended, or has otherwise become not feasible or not available, by reason of the restrictions set out in paragraph 5(f) below or otherwise, the Company may set other invitation period(s) as appropriate, expedient or desirable to invite Eligible Talents (who have not previously been invited to participate in the Amended Co-Ownership Plan IV after the Amendment Date in any of the Invitation Periods) to participate in the Amended Co-Ownership Plan IV to the extent that the expected CO4 Qualifying Shares of the Invitees who have accepted the Invitations will not exceed the maximum number of Shares that may underlie the RSUs granted pursuant to the Amended Co-Ownership Plan IV to all Participants as provided in paragraph 6(a) below.

All Invitations will be made subject to the following restrictions and conditions:

(i) the total investment value for the Rollover Shares of an Invitee determined according to the average closing price per Share based on the daily closing prices of the Shares as quoted on the Stock Exchange for the five (5) trading days immediately preceding the Amendment Date (such total amount being the “ Current Investment Amount ” in respect of such Invitee) together with the cash monetary amount such Invitee wishes to invest (such amount being the “ New Investment Amount ” in respect of such Invitee) as specified by such Invitee for the purchase of Shares (in each case, if any) (the total of the Current Investment Amount and the New Investment Amount in aggregate referred to as the “ Total Investment Amount ”) in aggregate must be: (A) equal to or exceed one-sixth (1/6th) of the Annual Remuneration Package of such Invitee; and (B) not more than two times of the Annual Remuneration Package of such Invitee; except that the minimum investment requirement as set forth in (A) above does not apply to an Invitee (if he/she already has such CO4 Shares held on his/her behalf prior to the Amendment Date) who has elected to have all (but not only a portion) of the CO4 Shares held on his/her behalf to continue to be subject to the Amended Co-Ownership Plan IV as Rollover Shares;
(ii) the maximum number of Shares available for purchase by all Participants with the New Investment Amounts shall not at any time exceed the maximum number of Award Shares as determined by reference to the CO4 Qualifying Shares that may underlie the RSUs granted pursuant to the Amended Co-Ownership Plan IV calculated in accordance with paragraph 6(a) below, after taking into account the total number of Rollover Shares of all Participants for the time being; and
(iii) the total number of Award Shares that are issuable to the Participants shall not exceed the Scheme Mandate Limit.

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If an Invitee who already has such CO4 Shares held on his/her behalf prior to the Amendment Date either specifies that only a portion (but not all) of the CO4 Shares held on his/her behalf prior to the Amendment Date shall continue to be subject to the Amended Co-Ownership Plan IV as Rollover Shares or specifies that none of his/her CO4 Shares shall continue to be subject to the Amended Co-Ownership Plan IV as Rollover Shares, such Invitee shall not be entitled to further invest any New Investment Amount for his/her purchase of Shares (and if he/she specifies such New Investment Amount, his/her election with respect to such New Investment Amount shall be void).

The Board may, by an acceptance notice, accept an Eligible Talent’s enrolment and participation in the Amended Co-Ownership Plan IV and his/her instructions to (i) (if he/she has such CO4 Shares held on his/her behalf prior to the Amendment Date) confirm that all or (if so specified) such part of his/her CO4 Shares shall continue to be subject to the Amended Co-Ownership Plan IV as Rollover Shares and/or (ii) purchase Shares under the Amended Co-Ownership Plan IV as specified by such Eligible Talent and will require the Eligible Talent to, in each case within 10 Business Days after the date of the acceptance notice, (i) transfer the legal title to the Rollover Shares to the Plan Trustee (to the extent not already held by the Plan Trustee) and/or (ii) remit the New Investment Amount to the Plan Trustee through the Company. The Board may, by reason of time required to comply with relevant foreign exchange regulations, at its discretion extend the period for the remittance of the New Investment Amount to the Plan Trustee via the Company, and if it is so extended, the participation of the relevant Participants in the Amended Co-Ownership Plan IV will be deemed to commence on the date of the remittance of their respective New Investment Amount to the Plan Trustee via the Company.

(b) Purchase of additional Shares with New Investment Amounts

After the receipt of the New Investment Amounts, the Company will direct and procure the Plan Trustee to endeavour to purchase Shares on behalf of all Participants who have accepted Invitations after the Amendment Date in the same Invitation Period, as far as reasonably practicable in accordance with the pricing guidelines set forth in the rules of the Amended Co-Ownership Plan IV (the “ Pricing Guidelines ”) unless the Board otherwise determines in its absolute discretion, until the aggregate New Investment Amounts remitted by those Participants in the same Invitation Period have been utilised using either or both of the following purchase methods over a reasonable period of time as is feasible to purchase the requisite number of Shares (each a “ Share Purchase Period ”):

(i) on-market purchase at the market price (taking into account factors including but not limited to the aggregate number of Shares to be purchased on-market, the average daily trading volume of the Shares, and the prevailing market price of the Shares) (Shares purchased using such a method are the “ On-Market Purchased Shares ”); and

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(ii) off-market purchase at the market price or at a discount to market price of the Shares to be determined by the Plan Trustee (Shares purchased using such a method are the “ Off-Market Purchased Shares ”).

The New Investment Amounts received from the Participants in the same Invitation Period after the Amendment Date shall be utilised to purchase Shares in the same Share Purchase Period and the Shares purchased by the Plan Trustee during any one such Share Purchase Period will be allocated among such Participants in such same Invitation Period on a pro-rata basis, based on their respective New Investment Amounts, provided that the number of Purchased Shares allocated to each of those Participants will be rounded down to the nearest number of Shares.

If and to the extent there are any remaining New Investment Amounts after the end of each Share Purchase Period (after taking into account the purchase of Shares in accordance with the Pricing Guidelines, unless the Board otherwise determines in its absolute discretion), such remaining New Investment Amounts shall be refunded to the relevant Participants from the relevant Invitation Period by the Plan Trustee through the Company, on a pro-rata basis to their respective New Investment Amounts.

(c) Priority if there is an over-subscription of CO4 Qualifying Shares

For any applicable Invitation Period, if the total number of Rollover Shares of all Participants for the time being and the total New Investment Amounts of the Invitees who have accepted an Invitation shall or is expected to result in the total number of CO4 Qualifying Shares for all Participants exceeding the maximum number of Award Shares (as determined by reference to the CO4 Qualifying Shares) that may underlie the RSUs granted pursuant to the Amended Co-Ownership Plan IV calculated in accordance with paragraph 6(a) below, the allocation of the CO4 Qualifying Shares shall be determined by the following priority (the “ Priority ”), in each case, as applicable:

(i) first, to satisfy the total number of Rollover Shares of Participants (who, for the avoidance of doubt, already have CO4 Shares held on their behalf prior to the Amendment Date, and including Executive Directors) for the time being;
(ii) second, to satisfy the New Investment Amounts of Participants (excluding Executive Directors) who already have CO4 Shares held on their behalf prior to the Amendment Date for up to one-quarter (1/4th) of the Annual Remuneration Package of each such Participant, and the entitlement of each such Participant shall be determined on a pro-rata basis as amongst all such Participants;

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(iii) third, to satisfy the New Investment Amounts of Participants (excluding Executive Directors) who have become Eligible Talents on or after 15 November 2021 for up to one time of the Annual Remuneration Package of each such Participant (together with the entitlements under paragraph 5(c)(ii) above), and the entitlement of each such Participant shall be determined on a pro-rata basis as amongst all such Participants;
(iv) fourth, to satisfy the remaining Total Investment Amounts of all Participants (excluding Executive Directors) and the entitlement of each such Participant shall be determined on a pro-rata basis as amongst all such Participants; and
(v) fifth, to satisfy the New Investment Amounts of Participants who are Executive Directors, and the entitlement of each such Participant shall be determined on a pro-rata basis as amongst all such Participants.

(d) Transfer of CO4 Qualifying Shares and CO4 Qualifying Shares Released on the Granting of RSUs

The Plan Trustee will hold the relevant CO4 Qualifying Shares (and Award Shares, if any) on trust for each Participant until the issue of a valid transfer notice by the relevant Participant or deemed issue of a valid transfer notice on each Vesting Date.

A Participant may only issue a transfer notice to the Plan Trustee in respect of the CO4 Qualifying Shares to which the Participant holds the beneficial title.

A transfer notice which purports to require the Plan Trustee to transfer any CO4 Qualifying Share prior to a Grant Date or a Vesting Date shall be valid but such Participant shall cease to participate in the Amended Co-Ownership Plan IV from the date of such transfer notice and shall not be entitled to any grant or vesting of RSUs (this shall not, however, affect any rights such Participant may have in his/her CO4 Qualifying Shares), provided that the Board shall have the power in its absolute discretion to designate such Participant (who has issued a transfer notice after a Grant Date) as a Good Leaver if such Participant is in financial difficulty or if there are exceptional circumstances as determined by the Board. A Good Leaver who issues a transfer notice with respect to all his/her CO4 Qualifying Shares shall still be entitled to the vesting of RSUs pursuant to paragraph 10(b) below.

Participants whose CO4 Qualifying Shares are held by the Plan Trustee shall be entitled to cash dividends, distributions and bonus shares (but not other distributions such as nil-paid rights) made by the Company with respect to the CO4 Qualifying Shares. Where there is a choice between scrip or cash dividends arising from such CO4 Qualifying Shares, the Plan Trustee shall always elect cash dividends (and Participants shall have no right of election). The Plan Trustee shall not take voting instructions from the Participants with respect to their CO4 Qualifying Shares held by the Plan Trustee and the Plan Trustee shall not exercise any voting rights attached to such CO4 Qualifying Shares held by it.

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(e) Grant of RSUs

On and subject to the terms of the Amended Co-Ownership Plan IV, where a Participant has CO4 Qualifying Shares held by the Plan Trustee and all the CO4 Qualifying Shares of such Participant remain continued to be held at all times by the Plan Trustee until the Grant Date after such Participant participated in the Amended Co-Ownership Plan IV, the Board shall make a Grant of one RSU for each CO4 Qualifying Share held by the Plan Trustee for such Participant promptly on the Grant Date after such Participant participated in the Amended Co-Ownership Plan IV.

On the same day as the granting by the Company of an RSU under the Amended Co-Ownership Plan IV, the Company shall publish an announcement in accordance with the Listing Rules.

Any Grant to any Director, chief executive or substantial shareholder of the Company, or any of their respective associates, shall be subject to the prior approval of the independent non-executive Directors.

(f) Timing Restrictions

The Company shall not make any Invitation for the contribution of New Investment Amounts to purchase Shares and any Invitee may not accept any Invitation during any of the following periods:

(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 ending on the date of publication of the results;
(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 publication of the results;
(iii) 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 date of publication of the results; and
(iv) 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 date of publication of the results.

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If the Company is in possession of unpublished inside information (as such term is defined in the SFO), it may not (i) make any Invitation; (ii) accept an Invitation; (iii) direct and procure the Plan Trustee to acquire On-Market Purchased Shares; (iv) grant any RSU; or (v) allot and issue any Award Share, until such inside information is published in accordance with the SFO or ceases to be inside information.

6. MAXIMUM NUMBER OF SHARES UNDERLYING THE RSUs

(a) Maximum aggregate number of Shares

At any time during the Term, the maximum aggregate number of Award Shares that may underlie the RSUs granted or to be granted pursuant to the Amended Co-Ownership Plan IV shall be calculated in accordance with the following formula:

X = A – B

where:

X = the maximum aggregate number of Shares that may underlie the RSUs to be granted pursuant to the Amended Co-Ownership Plan IV;
A = the Scheme Mandate Limit; and
B = the maximum aggregate number of Shares underlying the RSUs already granted pursuant to the Amended Co-Ownership Plan IV.

Subject to paragraph 12 below, Shares underlying the RSUs which have been cancelled in accordance with the terms of the Amended Co-Ownership Plan IV will not be counted for the purposes of determining the maximum aggregate number of Shares that may underlie the RSUs granted or to be granted pursuant to the Amended Co-Ownership Plan IV.

The total number of Award Shares that are issuable to the Participants shall not exceed the Scheme Mandate Limit.

(b) Number of Shares underlying the RSUs granted to a Participant

Where the Award Shares underlying the RSUs granted or to be granted pursuant to the Amended Co-Ownership Plan IV to a Participant would result in the total number of Shares issued and to be issued in respect of all RSUs granted (upon the satisfaction of all of the Vesting Conditions) to such Participant in the 12-month period up to and including the date of such grant of RSUs representing in aggregate over 1% of the relevant class of Shares in issue, such grant must be separately approved by the Shareholders in general meeting with such Participant and his/her close associates (or his/her associates if the Participant is a connected person) abstaining from voting, and the number and terms of the RSUs to be granted to such Participant must be fixed before the approval of the Shareholders. In such event, the Company must send a circular to the Shareholders containing the identity of the Participant, the number and terms of the RSUs to be granted (and the RSUs previously granted to such person), and all other information required under the Listing Rules.

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Where the Award Shares underlying the RSUs granted or to be granted pursuant to the Amended Co-Ownership Plan IV to a Director, a chief executive or a substantial shareholder of the Company or any of his or her respective associates would result in the total number of Shares issued and to be issued in respect of all RSUs granted (upon the satisfaction of the Vesting Conditions) to such person under the Amended Co-Ownership Plan IV and any other schemes of the Company in the 12-month period up to and including the date of such grant representing in aggregate over 0.1% of the then Shares in issue, such further grant of RSUs must be approved by the Shareholders at a general meeting of the Company, with voting to be taken by way of poll. The Company shall send a circular to the Shareholders containing all information as required under the Listing Rules in this regard. The Grantee, his or her associates and all core connected persons of the Company shall abstain from voting (except where any core connected person intends to vote against the proposed grant and his or her intention to do so has been stated in the aforesaid circular).

7. RIGHTS ATTACHED TO THE RSUS

The RSUs do not carry any right to vote at general meetings of the Company, or any dividend, transfer or other rights (including those arising on the winding-up of the Company).

No Grantee shall enjoy any of the rights of a Shareholder by virtue of the Grant of an RSU pursuant to the Amended Co-Ownership Plan IV, unless and until the legal and beneficial title of the Award Share underlying the RSU have been allotted and issued to the Grantee.

8. RIGHTS ATTACHED TO THE SHARES

The CO4 Qualifying Shares and Award Shares shall be subject to all the provisions of the Articles and shall rank pari passu in all respects with, and shall have the same voting, dividend, transfer and other rights (including those rights arising on a winding-up of the Company) as, the other fully paid Shares in issue on the date on which those Shares are allotted and issued or transferred (as the case may be) and, without prejudice to the generality of the foregoing, shall entitle the holders to participate in all dividends or other distributions paid or made on or after the date on which Shares are allotted and issued or transferred (as the case may be) other than any dividends or distributions previously declared or recommended or resolved to be paid or made if the record date thereof shall be before the date on which the Shares are allotted and issued or transferred (as the case may be).

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9. TRANSFERABILITY OF RSUS

An RSU shall be personal to the Grantee and shall not be assignable or transferable by the Grantee, provided that:

(i) during the validity period of the RSU and with the prior written consent of the Board and with the waiver from the Stock Exchange where necessary, the Grantee may transfer RSUs to a vehicle (including a trust or a private company) for the benefit of the Grantee and his/her family members by gift or pursuant to a court order relating to the settlement of marital property rights; or
(ii) subject to paragraph 12 below, following the Grantee’s death, RSUs may be transferred by will or by the laws of testacy and distribution.

Subject to the foregoing, a Grantee shall not in any way sell, transfer, charge, mortgage, encumber or create any interests in favour of any third party over or in relation to any RSU.

10. VESTING OF RSUS

(a) Vesting Dates and Vesting Conditions

Subject to the terms of the Amended Co-Ownership Plan IV, and provided all the CO4 Qualifying Shares of a Grantee remain continued to be held at all times by the Plan Trustee until a Vesting Date, the relevant portion of each RSU granted to such Grantee shall vest on each of the Vesting Dates following the granting of such RSU to such Grantee in respect of the Share underlying such RSU provided that the relevant vesting conditions as set forth below (the “ Vesting Conditions ”) have been satisfied:

Portion of an RSU becoming Vesting Date Vesting Conditions vested The date which (1) EBITDA for Financial 0.15 (or 15%) is 12 months Year 2023 is not less than from the Grant HK$2,615,000,000; and Date after the first Invitation (2) Capital Expenditure for Period Financial Year 2023 is not more than HK$550,000,000

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Vesting Date Vesting Conditions

Portion of an RSU becoming vested

The date within (1) EBITDA for Financial 0.35 (or 35%) 10 Business Year 2024 is not less than Days from the HK$2,746,000,000; and date of publication of (2) Capital Expenditure for the Company’s Financial Years 2023 and annual results for 2024 in aggregate is not Financial Year more than 2024 HK$1,100,000,000 The date within (1) EBITDA for Financial A = 0.5 x (B – 10 Business Year 2025 is not less than HK$2,801,000,000)/C Days from the HK$2,801,000,000 (being date of a compound annual growth A – the portion of an RSU publication of rate of approximately becoming vested the Company’s 3.5% from the EBITDA annual results for target of B – actual EBITDA for the Financial Year HK$2,615,000,000 for Financial Year 2025 and capped 2025 Financial Year 2023); and at HK$2,883,000,000 (2) Capital Expenditure for C – equals to HK$82,000,000, Financial Years 2023, which is the difference of 2024 and 2025 in HK$2,883,000,000 and aggregate is not more than HK$2,801,000,000 HK$1,650,000,000

Upon the vesting of any portion of one RSU on any Vesting Date, the Company shall on such Vesting Date promptly allot and issue the same portion of one (1) Award Share to the relevant Grantee directly or indirectly through the Plan Trustee. The total number of Award Shares that are issuable to the Participants under the granted RSUs shall not exceed the Scheme Mandate Limit.

(b) Adjustments

If a Grantee becomes a Good Leaver prior to any Vesting Date, the number of RSUs granted to him/her which shall be used as the reference point to determine the portion of RSUs which shall be vested to him/her according to paragraph 10(a) above on the Vesting Date which relates to the Financial Year during which he/she has become a Good Leaver and shall be determined on a pro-rated basis by dividing the number of calendar days during which such Participant has been a Talent from the beginning of the Financial Year during which he/she becomes a Good Leaver by the number of days for such Financial Year. If a Participant has become a Good Leaver during the Financial Year 2023 and he/she participated in the Amended Co-Ownership Plan IV pursuant to the first Invitation Period, his/her pro-rated entitlement shall be calculated on the basis that he/she has become a Talent from the beginning of the Financial Year 2023 (and this is notwithstanding his/her actual start date of becoming a Talent). For the avoidance of doubt, a Grantee who becomes a Good Leaver shall not be entitled to any vesting of RSU on any subsequent Vesting Date beyond the Vesting Date that relates to the Financial Year during which he/she has become a Good Leaver.

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(c) Vesting of RSUs in case of an M&A Event

If an M&A Event occurs after a Grant Date but prior to any Vesting Date, the Board may, in its absolute discretion, resolve to terminate or continue the Amended Co-Ownership Plan IV. If the Board in its absolute discretion resolves to terminate the Amended Co-Ownership Plan IV (being, the “ M&A Termination Date ”), the Board shall have absolute discretion to waive (or not to waive) any or all Vesting Conditions and determine the number or proportion of RSUs to be otherwise vested and any RSU (or any portion thereof) for which the Board determines not to be vested shall lapse on the M&A Termination Date. If the Board determines to terminate the Amended Co-Ownership Plan IV, the Participants shall be deemed to have issued a transfer notice with respect to all of their CO4 Qualifying Shares to the Company on the M&A Termination Date.

11. CORPORATE EVENTS

If:

(a) a general offer by way of takeover or otherwise (other than by way of scheme of arrangement pursuant to paragraph 11(b) below) is made to all the Shareholders (or all such Shareholders other than the offeror and/or any person controlled by the offeror and/or any person acting in association or concert with the offeror) by any person and such offer becomes or is declared unconditional prior to a Vesting Date, prior to the offer becoming or being declared unconditional; or
(b) a general offer for Shares by way of a scheme of arrangement is made by any person to all the Shareholders and has been approved by the necessary number of Shareholders at the requisite meetings prior to a Vesting Date, prior to such meetings; or
(c) pursuant to the Companies Law, a compromise or arrangement (other than a scheme of arrangement contemplated in paragraph 11(b) above) between the Company and the Shareholders and/or the creditors of the Company is proposed for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company or companies prior to a Vesting Date; or
(d) a notice is given by the Company to the Shareholders to convene a general meeting for the purpose of considering and, if thought fit, approving a resolution to voluntarily wind-up the Company prior to a Vesting Date,

the Board shall determine at its absolute discretion but treating all Grantees who received the Grant of RSUs on the same Grant Date fairly and taking into account the number of calendar days during which such Grantee has participated in the Amended Co-Ownership Plan IV (after the amendments and restatements which became effective from the Amendment Date), whether the Grantee is a Good Leaver or a Bad Leaver (where

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applicable), the number of RSUs (or portions thereof) (if any) that shall be vested (provided that a Grantee shall only be entitled to receive up to a maximum of one Award Share for each RSU granted to him/her), the period within which such RSUs shall be vested and the condition (if any) to vesting or the waiver of any or all such conditions, of any of the RSUs, and notify the Grantees of the same.

12. CANCELLATION AND CLAWBACK OF RSUS

A granted but unvested RSU of any Grantee shall be cancelled automatically upon the earliest of:

(a) the date on which such Grantee becomes a Bad Leaver;
(b) the date on which such Grantee (whether intentionally or otherwise) commits a breach of paragraph 9 above or any other provision of the Amended Co-Ownership Plan IV; and
(c) on the Vesting Date which is within 10 Business Days from the date of publication of the Company’s annual results for Financial Year 2025 (and, as the case may be, after the vesting on such Vesting Date or upon the determination that any relevant Vesting Condition on such Vesting Date shall be incapable of satisfaction).

The Board shall have the right to determine whether the Participant or Grantee is a Good Leaver or a Bad Leaver in accordance with the terms and conditions of the Amended Co-Ownership Plan IV and such determination by the Board shall be final and conclusive.

If a Grantee is a Good Leaver after the Grant Date but prior to the Vesting Date of any of his/her RSU, the Board shall notify the Grantee when and how much of such RSU shall be vested in accordance with paragraph 10(b) above.

Any cancellation of the RSUs granted may be effected on such terms as may be agreed with the relevant Grantee, as the Board may in its absolute discretion see fit and in a manner that complies with all applicable legal requirements for such cancellation. Where the Company cancels RSUs granted to a Participant and makes a new grant to the same Participant, such new grant may only be made under the Amended Co-Ownership Plan IV with available limit of the Award Shares underlying the RSUs referred to under paragraph 6(a) above. The RSUs cancelled will be regarded as utilized for the purpose of calculating the limits of the Award Shares underlying the RSUs under paragraph 6(a) above.

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13. REORGANISATION OF CAPITAL STRUCTURE

In the event of an alteration in the capital structure of the Company by way of a capitalisation issue, rights issue, subdivision or consolidation of shares or reduction of the share capital of the Company in accordance with applicable laws and the Listing Rules (other than any alteration in the capital structure of the Company as a result of an issue of Shares as consideration in a transaction to which the Company or any of its subsidiaries is a party or in connection with any share option, restricted share or other equity-based incentive schemes of the Company) while any RSU has not been vested, such corresponding adjustments (if any) shall be made to the number or nominal value of Shares underlying the RSU so far as unvested (such adjustment shall be proportionate to the change in the share capital of the Company), provided that any such adjustments give a Grantee no less proportion of the share capital of the Company as that to which that Grantee was previously entitled. In respect of any such adjustments, other than any made on a capitalisation issue, the auditors of the Company or an independent financial adviser to the Company (as the case may be) must confirm to the Board in writing that the adjustments are in their opinion fair and reasonable.

14. ALTERATION OF THE AMENDED CO-OWNERSHIP PLAN IV

Subject to that provided in this paragraph 14 , the Board may alter any of the terms of the Amended Co-Ownership Plan IV at any time without the approval of the Shareholders in general meeting, except that in respect of the provisions of the Amended Co-Ownership Plan IV as to: (a) the definitions of “Participant”, “Grantee”, “Grant Date”, “Scheme Mandate Limit”, “Vesting Conditions” and “Vesting Date”; (b) the provisions relating to the matters set out in Rule 17.03 of the Listing Rules; and (c) the terms and conditions of the Amended Co-Ownership Plan IV which are of a material nature (in this regard, the Board’s determination as to whether any proposed alteration to the terms and conditions of the Amended Co-Ownership Plan IV is material shall be conclusive), such provisions in the Amended Co-Ownership Plan IV set out in the foregoing sub-paragraphs (a) to (c) shall not be altered to the advantage of Grantees or prospective Grantees except with the prior approval of the Shareholders in general meeting and provided that no such alteration shall operate to affect adversely the terms of issue of any RSUs granted or agreed to be granted prior to such alteration except with the consent or sanction of the majority of such Grantees.

Any change to the terms of RSUs granted to a Grantee must be approved by the Board, the Remuneration Committee, the independent non-executive Directors and/or the Shareholders (as the case may be) if the initial grant of the RSUs was approved by the Board, the Remuneration Committee, the independent non-executive Directors and/or the Shareholders (as the case may be). This requirement does not apply where the alterations take effect automatically under the existing terms of the Amended Co-Ownership Plan IV.

Any changes to the authority of the Board or the Plan Trustee in relation to any alteration of the terms of the Amended Co-Ownership Plan IV shall not be made without the prior approval of the Shareholders in general meeting.

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Notwithstanding anything to the contrary contained in this paragraph 14 , the Board may at any time alter or modify the Amended Co-Ownership Plan IV in any way to the extent necessary to cause the Amended Co-Ownership Plan IV to comply with any statutory provisions or the regulations of any regulatory or other relevant authority. Any amendment to any terms of the Amended Co-Ownership Plan IV or the RSUs granted shall comply with the relevant requirements of Chapter 17 of the Listing Rules.

15. TERMINATION OF THE AMENDED CO-OWNERSHIP PLAN IV

The Company may, by ordinary resolution in general meeting, at any time terminate the Amended Co-Ownership Plan IV and, in such event, no further RSUs may be granted but in all other respects the terms of the Amended Co-Ownership Plan IV shall remain in full force and effect in respect of RSUs which are granted during the Term and which remain unvested immediately prior to the termination of the Amended Co-Ownership Plan IV.

Upon termination of the Amended Co-Ownership Plan IV, all CO4 Qualifying Shares held by the Plan Trustee shall be returned to the Participants. RSUs granted during the Term shall continue to be valid in accordance with their terms of Grant after the end of the Term.

16. ADMINISTRATION OF THE AMENDED CO-OWNERSHIP PLAN IV

The Amended Co-Ownership Plan IV shall be subject to the administration of the Board whose decision as to all matters arising in relation to the Amended Co-Ownership Plan IV or its interpretation or effect shall (save as otherwise provided in the rules of the Amended Co-Ownership Plan IV) be final and binding on all parties.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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HKBN Ltd. 香港寬頻有限公司

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 1310)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the extraordinary general meeting of HKBN Ltd. (the “ Company ”) will be held at 10:00 a.m. on Friday, 28 April 2023, at Awesome Space, 14th Floor, Trans Asia Centre, 18 Kin Hong Street, Kwai Chung, New Territories, Hong Kong for the following purposes. Unless otherwise indicated, capitalised terms used herein shall have the same meaning as those defined in the circular of the Company dated 6 April 2023 (the “ Circular ”).

ORDINARY RESOLUTIONS

“ That :
(a) the Amended Co-Ownership Plan IV of the Company constituted by the amended and restated rules (including the Scheme Mandate Limit for new Shares to be allotted and issued as Award Shares pursuant to the granting and vesting of the RSUs according to the terms and conditions of the Amended Co-Ownership Plan IV) adopted by the board of Directors of the Company be and is hereby approved; and
(b) any one or more of the Directors be and are hereby authorised to sign or execute such other documents or supplemental agreements or deeds on behalf of the Company and to do all such things and take all such actions as considered to be necessary or desirable for the purpose of giving effect to the implementation of the Amended Co-Ownership Plan IV.”
“ That conditional upon ordinary resolution numbered 1 set out above being duly passed, the grant(s) and award(s) of RSUs and Award Shares to Mr. Chu Kwong YEUNG in accordance with the terms of the Amended Co-Ownership Plan IV up to his maximum entitlement as set forth in the Circular be and is hereby approved and any Director be and is hereby authorised to take any step and execute such other documents as he/she consider necessary or desirable to carry out or give effect to or otherwise in connection with the grant(s) and award(s) of RSUs and Award Shares to Mr. Chu Kwong YEUNG.”

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NOTICE OF EXTRAORDINARY GENERAL MEETING

“ That conditional upon ordinary resolution numbered 1 set out above being duly passed, the grant(s) and award(s) of RSUs and Award Shares to Mr. Ni Quiaque LAI in accordance with the terms of the Amended Co-Ownership Plan IV up to his maximum entitlement as set forth in the Circular be and is hereby approved and any Director be and is hereby authorised to take any step and execute such other documents as he/she consider necessary or desirable to carry out or give effect to or otherwise in connection with the grant(s) and awards(s) of RSUs and Award Shares to Mr. Ni Quiaque LAI.”

By Order of the Board HKBN Ltd. Bradley Jay HORWITZ Chairman

Hong Kong, 6 April 2023

Principal Place of Business in Hong Kong:

12th Floor, Trans Asia Centre

18 Kin Hong Street, Kwai Chung

New Territories Hong Kong

Notes:

(1) Any member of the Company entitled to attend, speak and vote at the EGM may appoint another person as his/her/its proxy to attend, speak and vote instead of him/her/it. A member may appoint more than one proxy to attend on the same occasion. A proxy need not be a member of the Company.
(2) Where there are joint registered holders of any share, any one of such persons may vote at the EGM, either personally or by proxy, in respect of such share of the Company as if he/she/it were solely entitled thereto; but if more than one of such joint holders be present at the EGM personally or by proxy, that one of the said persons so present whose name stands first in the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof to the exclusion of the votes of the other joint holders.
(3) In order to be valid, the form of proxy duly completed and signed in accordance with the instructions printed thereon together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy thereof or, in the case of a member which is a corporation, under its seal or the hand of an officer or attorney duly authorised, must be delivered to the Company’s Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof.
(4) The register of members of the Company will be closed from Tuesday, 25 April 2023 to Friday, 28 April 2023, both days inclusive, during which period no transfer of shares will be registered. All transfers, accompanied by the relevant share certificates, must be lodged with the Company’s Hong Kong branch share registrar and transfer office, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, no later than 4:30 p.m. on Monday, 24 April 2023 in order to establish the identity of the shareholders who are entitled to attend and vote at the EGM (“ Entitlement to EGM ”). The record date for the Entitlement to EGM will be on Friday, 28 April 2023.

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AI assistant

HKBN Ltd. — Proxy Solicitation & Information Statement 2023

49841_rns_2023-04-04_a9d241e7-7e3a-4356-ad58-8a58352dbf7a.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

HKBN Ltd.

香港寬頻有限公司

(1) PROPOSED ADOPTION OF THE AMENDED AND RESTATED CO-OWNERSHIP PLAN IV;

(2) POTENTIAL GRANTS OF RSUS AND AWARD SHARES TO THE EXECUTIVE DIRECTORS OF THE COMPANY;

AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

HKBN Ltd. 香港寬頻有限公司

(Stock Code: 1310)

Registered Office:

Principal Place of Business in Hong Kong:

(1) PROPOSED ADOPTION OF THE AMENDED AND RESTATED CO-OWNERSHIP PLAN IV; (2) POTENTIAL GRANTS OF RSUS AND AWARD SHARES TO THE EXECUTIVE DIRECTORS OF THE COMPANY;

AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

1. INTRODUCTION

2. PROPOSED ADOPTION OF THE AMENDED CO-OWNERSHIP PLAN IV

3. PROPOSED GRANTS OF RSUS AND AWARD SHARES TO EACH EXECUTIVE DIRECTOR UNDER THE AMENDED CO-OWNERSHIP PLAN IV

a. Overview of the Group and the purpose of the Amended Co-Ownership Plan IV

b. Key features of the Amended Co-Ownership Plan IV

LETTER FROM THE BOARD

LETTER FROM THE BOARD

5. IMPLICATIONS UNDER THE LISTING RULES

a. Proposed adoption of the Amended Co-Ownership Plan IV

b. Proposed Grants of RSUs and Award Shares to each Executive Director

c. Directors’ views

d. Extraordinary General Meeting

6. RECOMMENDATIONS

7. ACTION TO BE TAKEN

8. EXTRAORDINARY GENERAL MEETING

Computershare Hong Kong Investor Services Limited

9. RESPONSIBILITY STATEMENT

10. DOCUMENT ON DISPLAY

1. PURPOSE OF THE AMENDED CO-OWNERSHIP PLAN IV

2. RESTRICTED SHARE UNITS

3. PARTICIPANTS OF THE AMENDED CO-OWNERSHIP PLAN IV AND BASIS FOR DETERMINING THE ELIGIBILITY OF THE PARTICIPANTS

4. STATUS OF THE AMENDED CO-OWNERSHIP PLAN IV

(a) Conditions of the Amended Co-Ownership Plan IV

(b) Term of the Amended Co-Ownership Plan IV

5. ROLLOVER AND PURCHASE OF SHARES AND GRANT OF RSUS

(a) Invitation to participate in the Amended Co-Ownership Plan IV

(b) Purchase of additional Shares with New Investment Amounts

(c) Priority if there is an over-subscription of CO4 Qualifying Shares

(d) Transfer of CO4 Qualifying Shares and CO4 Qualifying Shares Released on the Granting of RSUs

(e) Grant of RSUs

(f) Timing Restrictions

6. MAXIMUM NUMBER OF SHARES UNDERLYING THE RSUs

(a) Maximum aggregate number of Shares

(b) Number of Shares underlying the RSUs granted to a Participant

7. RIGHTS ATTACHED TO THE RSUS

8. RIGHTS ATTACHED TO THE SHARES

9. TRANSFERABILITY OF RSUS

10. VESTING OF RSUS

(a) Vesting Dates and Vesting Conditions

Vesting Date Vesting Conditions

(b) Adjustments

(c) Vesting of RSUs in case of an M&A Event

11. CORPORATE EVENTS

12. CANCELLATION AND CLAWBACK OF RSUS

13. REORGANISATION OF CAPITAL STRUCTURE

14. ALTERATION OF THE AMENDED CO-OWNERSHIP PLAN IV

15. TERMINATION OF THE AMENDED CO-OWNERSHIP PLAN IV

16. ADMINISTRATION OF THE AMENDED CO-OWNERSHIP PLAN IV

HKBN Ltd. 香港寬頻有限公司

NOTICE OF EXTRAORDINARY GENERAL MEETING

ORDINARY RESOLUTIONS

NOTICE OF EXTRAORDINARY GENERAL MEETING

By Order of the Board HKBN Ltd. Bradley Jay HORWITZ Chairman

More from HKBN Ltd.

HKBN Ltd. Proxy Solicitation & Information Statement 2023