Kerry Properties Limited — Proxy Solicitation & Information Statement 2002

Mar 27, 2002

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about this circular or as to the action you should take, you should consult your stockholder or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

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

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

PROPOSALS INVOLVING ADOPTION OF THE 2002 SHARE OPTION SCHEME AND TERMINATION OF THE EXISTING SHARE OPTION SCHEME

A notice convening a special general meeting of Kerry Properties Limited to be held at Island Ballroom, Level 5, Island Shangri-La Hotel, Pacific Place, Supreme Court Road, Central, Hong Kong at 10:45 am on Wednesday, 17 April 2002 (or as soon thereafter as the annual general meeting of the Company convened for the same place and date at 10:30 am shall have been concluded or adjourned) or any adjournment thereof to approve the matters referred to in this circular is set out on page 21 of this circular.

Whether you are able to attend the meeting or not, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon and deposit the same at Abacus Share Registrars Limited, the Company’s branch share registrars in Hong Kong, of 5th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

28 March 2002

CONTENTS

		Page
Responsibility Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Letter from the Board
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
2.	Adoption of the 2002 Share Option Scheme and
	Termination of the Existing Share Option Scheme . . . . . . . . . . . . . . . . . .	8
3.	Value of the Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
4.	Conditions precedent of the 2002 Share Option Scheme. . . . . . . . . . . . . . . .	10
5.	Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
6.	Application for listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
7.	Action to be taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
8.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Appendix – Summary of the Principal Terms of
	the 2002 Share Option Scheme. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Notice of Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		21

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RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other material facts not contained herein the omission of which would make any statement contained in this circular misleading.

– 1 –

DEFINITIONS

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

“2002 Share Option Scheme”	the new share option scheme to be adopted by the
	Company pursuant to Ordinary Resolution No. 1 as set
	out in the Notice of Special General Meeting in its present
	or any amended form
“Adoption Date”	the date on which the 2002 Share Option Scheme is
	adopted by resolution of the Company in general meeting
“Affiliate Company”	a Controlling Shareholder of the Company or a Subsidiary
	or Associate of a Controlling Shareholder
“Allotment Date”	the date on which Shares are allotted to a Grantee
	pursuant to an Option granted and exercised hereunder
“Associate”	shall have the meaning ascribed to it under the Listing
	Rules, save that in the definition of “Eligible Person”
	and elsewhere expressly provided in the provisions of
	the 2002 Share Option Scheme, the percentage stated in
	the Listing Rules’ definition of an “associate” as the
	amount specified in the Takeover Code shall instead be
	the Relevant Percentage
“Auditors”	the auditors of the Company at the relevant time
“Bankruptcy Ordinance”	the Bankruptcy Ordinance (Chapter 6 of the laws of Hong
	Kong) as amended from time to time
“Board”	the board of directors of the Company or, except as
	provided in the 2002 Share Option Scheme, a duly
	authorised committee thereof
“Bondholders”	holders of the Convertible Bonds
“Business Day”	shall have the meaning ascribed to it under the Listing
	Rules
“Commencement Date”	in respect of any particular Option, the date upon which
	the Option is deemed to be granted and accepted in
	accordance with the provisions of the 2002 Share Option
	Scheme

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DEFINITIONS

• “Companies Ordinance”

• “Company”

• “Controlling Shareholder”

• “Convertible Bonds”

• “Directors”

• “Eligible Person”

the Companies Ordinance (Chapter 32 of the laws of Hong Kong) as amended from time to time

Kerry Properties Limited, a company incorporated in Bermuda with limited liability and the Shares of which are listed on HKSE

shall have the meaning ascribed to it under the Listing Rules

the 2% convertible guaranteed bonds due 2007 issued by Kerry Properties Capital Limited, an indirect whollyowned subsidiary of the Company, convertible into Shares in, and unconditionally and irrevocably guaranteed by, the Company

the directors of the Company

means any of the following persons:

• (a) an Executive;

• (b) a director or proposed director (including an independent non-executive director) of any member of the Group;

• (c) a shareholder of any member of the Group;

• (d) a supplier of goods or services to any member of the Group;

• (e) a customer, consultant, business or joint venture partner, franchisee, contractor, agent or representative of any member of the Group;

• (f) a person or entity that provides research, development or other technological support or any advisory, consultancy, professional or other services to any member of the Group;

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DEFINITIONS

• (g) a landlord or tenant (including a sub-tenant) of any member of the Group; and

• (h) an Associate of any of the foregoing persons

“Executive”	any executive director of, manager of, or other employee
	holding an executive, managerial, supervisory or similar
	position in, any member of the Group (an “Employee”),
	any proposed Employee, any full-time or part-time
	Employee, or a person for the time being seconded to
	work full-time or part-time for any member of the Group
“Existing Grantee”	a person who has accepted the offer of the grant of an
	Option in accordance with the terms of the Existing Share
	Option Scheme
“Existing Optionholders”	holders of the outstanding Options granted under the
	Existing Share Option Scheme
“Existing Share Option Scheme”	the existing executive share option scheme adopted by
	the Company on 27 March 1997
“Grantee”	any Eligible Person who accepts the offer of the grant of
	an Option in accordance with the terms of the 2002 Share
	Option Scheme or (in the case of an Eligible Person
	being an individual and where the context so permits)
	the legal personal representative(s) entitled to any such
	Option in consequence of the death of the Eligible Person
“Group”	the Company, its Subsidiaries and Associates, and
	Invested Entities
“HKSE”	The Stock Exchange of Hong Kong Limited
“HK$”	Hong Kong dollars
“Hong Kong”	The Hong Kong Special Administrative Region of the
	People’s Republic of China
“Invested Entity”	a corporation, partnership, incorporated or unincorporated
	body or other entity in which the Company or any of its
	Subsidiaries holds an interest

– 4 –

DEFINITIONS

“Latest Practicable Date”

26 March 2002, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

“Listing Rules” the Rules Governing the Listing of Securities on HKSE as amended from time to time

“Non-Executive Director a non-executive director who retires pursuant to the Retirement” provisions of the Company’s Bye-laws (as amended from time to time) and who notifies the Company that he is not offering himself up for re-election at the Company’s annual general meeting

• “Notice of Special General the notice convening the Special General Meeting as set Meeting” out on page 21 of this circular

• “Offer Date”

• the date of the Board resolution approving the grant of Options, which must be a Business Day

• “Option” an option to subscribe for Shares granted pursuant to the Existing Share Option Scheme or the 2002 Share Option Scheme, as the context requires

• “Option Period” in respect of any particular Option, such period as the Board may in its absolute discretion determine, save that such period shall not be longer than 10 years commencing on the Commencement Date

• “Option Shares” Shares to which any particular Option relates

• “Ordinary Resolutions” the proposed ordinary resolutions as referred to in the Notice of Special General Meeting

• “Other Share Option Scheme” any and all schemes of the Company other than the 2002 Share Option Scheme involving the grant of options over new Shares or other new securities of the Company

– 5 –

DEFINITIONS

“Relevant Percentage”

shall mean the higher of:

• (i) the percentage stated in the Listing Rules’ definition of an associate as the amount specified in the Takeover Code as being the level for triggering a mandatory general offer; and

• (ii) the amount specified in the Securities (Disclosure of Interests) Ordinance (Chapter 396 of the laws of Hong Kong) as amended from time to time as being the amount of voting power a person is entitled to exercise or control the exercise of upon which that person is taken to be interested in the shares of a corporation

“Shares”

shares of HK$1.00 each of the Company, or, if there has been a subdivision, consolidation, reclassification of or reconstruction of the share capital of the Company, shares forming part of the ordinary share capital of the Company

• “Special General Meeting”

a special general meeting of the Company to be held at Island Ballroom, Level 5, Island Shangri-La Hotel, Pacific Place, Supreme Court Road, Central, Hong Kong at 10:45 am on Wednesday, 17 April 2002 (or as soon thereafter the annual general meeting of the Company convened for the same place and date at 10:30 am shall have been concluded or adjourned) or any adjournment thereof

• “Subscription Price” the price per Share at which a Grantee may subscribe for Shares on the exercise of an Option pursuant to the provisions of the 2002 Share Option Scheme

• “Subsidiary” a subsidiary (within the meaning of the Companies Ordinance) of the Company from time to time, whether incorporated in Hong Kong or elsewhere

• “Substantial Shareholder”

• shall have the meaning ascribed to it under the Listing Rules

• “Takeover Code”

• the Hong Kong Code on Takeovers and Mergers approved by the Securities and Futures Commission from time to time

“US$”

US dollars

– 6 –

LETTER FROM THE BOARD

Executive Directors:

Mr. KUOK Khoon Loong, Edward (Chairman) Mr. ANG Keng Lam

(Deputy Chairman and Joint Managing Director) Mr. WONG Siu Kong (Joint Managing Director) Mr. HO Shut Kan Mr. Thaddeus Thomas BECZAK

Independent Non-Executive Directors: Dr. FUNG Kwok King, Victor Mrs. LEE Pui Ling, Angelina Mr. Christopher Roger MOSS, O.B.E.

Registered Office: Cedar House 41 Cedar Avenue Hamilton HM12 Bermuda

Head Office and Principal Place of Business in Hong Kong:

13th & 14th Floors Cityplaza 3 14 Taikoo Wan Road Taikoo Shing Hong Kong

26 March 2002

To the shareholders of the Company and,

for information only, the Existing Optionholders and the Bondholders,

Dear Sir or Madam,

PROPOSALS INVOLVING ADOPTION OF THE 2002 SHARE OPTION SCHEME AND TERMINATION OF THE EXISTING SHARE OPTION SCHEME

1. INTRODUCTION

In view of the recent changes to Chapter 17 of the Listing Rules which governs the operation of share option schemes, the Directors propose to recommend to the shareholders of the Company at the Special General Meeting to approve the adoption of the 2002 Share Option Scheme and simultaneously terminate the Existing Share Option Scheme. The purpose of this circular is to provide you with information relating to these proposals and to seek your approval.

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LETTER FROM THE BOARD

2. ADOPTION OF THE 2002 SHARE OPTION SCHEME AND TERMINATION OF THE EXISTING SHARE OPTION SCHEME

The Existing Share Option Scheme was adopted by the Company on 27 March 1997. The Existing Share Option Scheme is the first and only share option scheme adopted by the Company since its incorporation on 2 January 1996 and will expire on 26 March 2007.

It is proposed that, subject to the approval of the shareholders of the Company for the adoption of the 2002 Share Option Scheme at the Special General Meeting, the Existing Share Option Scheme shall be terminated with effect from the conclusion of the Special General Meeting (such that thereafter no further Options shall be offered but the Options which had been granted during the life of the Existing Share Option Scheme shall continue to be valid and exercisable in accordance with their terms of issue and in all other respects the provisions of the Existing Share Option Scheme shall remain in full force and effect) and the 2002 Share Option Scheme will take effect on the date of its adoption at the Special General Meeting. Operation of the 2002 Share Option Scheme will commence after all conditions precedent have been fulfilled.

The Directors consider that in order to enable the Group to motivate Eligible Persons to optimise their future contributions to the Group and/or to reward them for their past contributions, to attract and retain or otherwise maintain on-going relationships with such Eligible Persons who are significant to and/or whose contributions are or will be beneficial to the performance, growth and success of the Group, it is important that the Group should continue to provide such Eligible Persons with an additional incentive by offering them an opportunity to obtain an ownership interest in the Company and to reward them for contributing to the long term success of the Group.

The 2002 Share Option Scheme permits the Company to grant Options to a wider category of Eligible Persons and not just the Existing Grantees as under the Existing Share Option Scheme. Under the provisions of the 2002 Share Option Scheme, the Directors have discretion to set a minimum period for which an Option has to be held before it may be exercised. This discretion allows the Directors to provide incentives to an Eligible Person to remain as an Eligible Person during the minimum period and thereby enable the Group to continue to benefit from the services of such Eligible Person during such period. This discretion, coupled with the power of the Directors to impose any performance target as they may consider appropriate before any Option can be exercised, enables the Group to provide incentives to the Eligible Persons to use their best endeavours in assisting the growth and the development of the Group. The flexibility given to the Directors to grant Options to Eligible Persons, other than the Existing Grantees, and to impose minimum periods for which the Options have to be held and performance targets that have to be achieved before the Options can be exercised, will place the Group in a better position to attract human resources that are valuable to the growth and the development of the Group as a whole, compared to the Existing Share Option Scheme.

It is therefore proposed that the 2002 Share Option Scheme for the benefit of the Eligible Persons be adopted and the Existing Share Option Scheme be terminated simultaneously at the Special General Meeting. A summary of the principal terms of the 2002 Share Option Scheme is set out in the Appendix to this circular. A copy of the 2002 Share Option Scheme

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LETTER FROM THE BOARD

will be available for inspection during normal business hours at the principal place of business of the Company in Hong Kong at 13th & 14th Floors, Cityplaza 3, 14 Taikoo Wan Road, Taikoo Shing, Hong Kong during the 14-day period immediately preceding the Special General Meeting and at the Special General Meeting itself.

On 27 March 1997, the Company adopted the Existing Share Option Scheme pursuant to which Options to subscribe for an aggregate of up to 10 per cent. of the issued share capital of the Company from time to time can be granted. As at the Latest Practicable Date, the issued share capital of the Company is 1,155,727,489 Shares and the Company had granted Options to subscribe for a total of 36,256,631 Option Shares under the Existing Share Option Scheme, of which Options to subscribe for 36,216,631 Option Shares had been validly accepted. Options to subscribe for a total of 8,633,813 Option Shares were lapsed and no Options were cancelled under the Existing Share Option Scheme. No options have been exercised under the Existing Share Option Scheme since its adoption by the shareholders of the Company.

On 25 March 1997, Convertible Bonds with principal amount of US$250,000,000 were issued. The Convertible Bonds are convertible at the option of the Bondholders into Shares of the Company at a conversion price of HK$21.50 per Share and at a fixed rate of exchange on conversion of HK$7.7474 = US$1. As at the Latest Practicable Date, the principal amount of the outstanding Convertible Bonds was US$400,000. Full conversion of such Convertible Bonds would result in the issue of a maximum of 144,137 Shares in the Company.

Under the Existing Share Option Scheme, the Company can grant Options to subscribe for up to 115,572,748 Option Shares, representing 10 per cent. of the issued share capital of the Company as at the Latest Practicable Date. As at the Latest Practicable Date, Options to subscribe for a total of 27,582,818 Option Shares are still outstanding. Assuming no change in the issued share capital of the Company until the Special General Meeting, there are Options to subscribe for up to 87,989,930 Option Shares available to be granted by the Directors under the Existing Share Option Scheme.

Pursuant to Rule 17.05 of the Listing Rules, a grant of Options under the 2002 Share Option Scheme may not be made after a price sensitive event has occurred or a price sensitive matter has been the subject of a decision until such price sensitive information has been published in the newspapers. In particular, during the period commencing one month immediately preceding the earlier of (a) the date of the meeting of the Board for the approval of the Company’s interim or annual results; and (b) the deadline for the Company to publish its interim or annual results announcement, and ending on the date of the results announcement, no Options under the 2002 Share Option Scheme may be granted. The period during which no Options under the 2002 Share Option Scheme may be granted will cover any delay in the publication of a results announcement.

In respect of the operation of the 2002 Share Option Scheme, the Company will comply with all relevant requirements under Chapter 17 of the Listing Rules.

3. VALUE OF THE OPTIONS

The Directors consider that it is not appropriate to state the value of all the Options that can be granted under the 2002 Share Option Scheme as if they had been granted at the Latest Practicable Date prior to the adoption of the 2002 Share Option Scheme given that the variables

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LETTER FROM THE BOARD

which are crucial for the calculation of the value of such Options cannot be determined. The variables which are critical for the determination of the value of such Options include, the Subscription Price for the Shares upon the exercise of the subscription rights attaching to the Options, whether or not Options will be granted under the 2002 Share Option Scheme and the timing of the grant of such Options, the period during which the subscription rights may be exercised, the discretion of the Directors to impose any performance target that has to be achieved before the subscription rights attaching to the Options can be exercised and any other conditions that the Directors may impose on the Options and whether or not such Options, if granted, will be exercised by the Grantees. The Subscription Price payable for the Shares depends on the price of the Shares as quoted on HKSE, which in turn depends on when the Directors are to grant Options under the 2002 Share Option Scheme. With a scheme life of ten years, the Directors are of the view that it is too premature to state whether or not Options will be granted under the 2002 Share Option Scheme, and if so, the number of Options that may be granted. It is also difficult to ascertain with accuracy the Subscription Price of the Shares given that the share price may fluctuate during the 10-year life span of the 2002 Share Option Scheme. In the premises, the Directors are of the view that the value of the Options depends on a number of variables which are either difficult to ascertain or can only be ascertained subject to a number of theoretical bases and speculative assumptions. Accordingly, the Directors believe that any calculation of the value of the Options will not be meaningful and may be misleading to the shareholders of the Company in the circumstances.

4. CONDITIONS PRECEDENT OF THE 2002 SHARE OPTION SCHEME

The adoption of the 2002 Share Option Scheme is subject to the following conditions:

• (a) the approval of the shareholders of the Company for the adoption of the 2002 Share Option Scheme at the Special General Meeting; and

• (b) HKSE granting approval for the listing of, and permission to deal in, the Shares in the Company to be issued and allotted pursuant to the exercise of the Options in accordance with the terms and conditions of the 2002 Share Option Scheme.

Subject to satisfaction of the above conditions, the total number of Shares which may be issued upon exercise of all Options to be granted under the 2002 Share Option Scheme and options to be granted under any other schemes of the Company shall not in aggregate exceed 10 per cent. of the Shares in issue as at the Adoption Date (such 10 per cent. shall represent 115,572,748 Shares assuming no change in the issued share capital of the Company until the Special General Meeting). Pursuant to the Listing Rules, the Company may obtain approval from its shareholders to refresh the 10 per cent. limit. However, the maximum number of Shares which may be issued upon exercise of all options outstanding and yet to be exercised under the 2002 Share Option Scheme and any other schemes of the Company (including the Existing Share Option Scheme) shall, pursuant to the Listing Rules, not exceed 30 per cent. of the issued share capital of the Company from time to time.

The 2002 Share Option Scheme may be altered in any respect by resolution of the Board except that the terms referred to in Rule 17.03 of the Listing Rules shall not be altered to the advantage of Grantees or prospective Grantees except with the prior approval of the shareholders of the Company in general meeting. Once the 2002 Share Option Scheme is

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LETTER FROM THE BOARD

adopted, any alterations to the terms and conditions thereof, which are of a material nature, or any change to the terms of Options granted must be approved by the shareholders of the Company in general meeting, except where the alterations take effect automatically under the existing terms of the 2002 Share Option Scheme. The amended terms of the 2002 Share Option Scheme and all Options must continue to comply with the relevant requirements of Chapter 17 of the Listing Rules.

5. SPECIAL GENERAL MEETING

Notice of the Special General Meeting is set out on page 21 of this circular. A form of proxy for use at the Special General Meeting is also enclosed therewith.

The Ordinary Resolutions to approve the adoption of the 2002 Share Option Scheme and the termination of the Existing Share Option Scheme with effect from the conclusion of the Special General Meeting will be proposed at such meeting.

6. APPLICATION FOR LISTING

Application will be made to the Listing Committee of HKSE for approval of the listing of, and permission to deal in, the Shares which may fall to be issued pursuant to the exercise of any Options that may be granted under the 2002 Share Option Scheme.

7. ACTION TO BE TAKEN

Whether or not you intend to attend the Special General Meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon and deposit the same at Abacus Share Registrars Limited, the Company’s branch share registrars in Hong Kong, of 5th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong not less than 48 hours before the time appointed for holding the Special General Meeting or any adjournment thereof. Completion and deposit of the form of proxy will not preclude the shareholders of the Company from attending and voting in person at the Special General Meeting if they so wish.

8. RECOMMENDATION

The Directors believe that the adoption of the 2002 Share Option Scheme and the termination of the Existing Share Option Scheme are in the best interests of the Company and its shareholders and so recommend its shareholders to vote in favour of the Ordinary Resolutions at the Special General Meeting.

The Company will publish in the newspapers an announcement on the outcome of the Special General Meeting for the adoption of the 2002 Share Option Scheme on the business day following such meeting.

Yours faithfully, For and on behalf of the Board

Kerry Properties Limited Kuok Khoon Loong, Edward Chairman

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SUMMARY OF THE PRINCIPAL TERMS OF THE 2002 SHARE OPTION SCHEME

APPENDIX

This Appendix summarises the principal terms of the 2002 Share Option Scheme but does not form part of, nor does it intend to be part of, the 2002 Share Option Scheme nor should it be taken as affecting the interpretation of the terms of the 2002 Share Option Scheme. The Directors reserve the right at any time prior to the Special General Meeting to make such amendments to the 2002 Share Option Scheme as they may consider necessary or appropriate provided that such amendments do not conflict in any material aspects with the summary in this Appendix.

The following is a summary of the principal terms of the 2002 Share Option Scheme to be submitted to the shareholders of the Company for adoption at the Special General Meeting:

(1) Purpose of the 2002 Share Option Scheme

The 2002 Share Option Scheme is to:

• (a) motivate the Eligible Persons to optimise their future contributions to the Group; and/or

• (b) reward the Eligible Persons for their past contributions, attract and retain or otherwise maintain on-going relationships with Eligible Persons who are significant to and/or whose contributions are or will be beneficial to the performance, growth or success of the Group, and additionally in the case of Executives, enable the Group to attract and retain individuals with experience and ability and/or to reward them for their past contributions.

(2) Who may join and basis for determining eligibility

The Board may, at its discretion, grant Options to the Eligible Persons to subscribe for Shares at HK$1.00 per Option.

The basis of eligibility of any of the Eligible Persons to the grant of any Options shall be determined by the Directors from time to time on the basis of their contribution to the development and the growth of the Group.

For the avoidance of doubt only, the grant of any options by the Company for the subscription of Shares to any person who falls within the definition of Eligible Persons shall not, by itself, unless the Directors otherwise determine, be construed as a grant of Options under the 2002 Share Option Scheme.

(3) Grant of Options

• (a) Subject to the terms of the 2002 Share Option Scheme, the Board shall be entitled at any time within a period of 10 years commencing on the Adoption Date to offer the grant of any Option to any Eligible Person as the Board may in its absolute discretion select and, on acceptance of the offer, grant such part of the Option as accepted to the Eligible Person.

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SUMMARY OF THE PRINCIPAL TERMS OF THE 2002 SHARE OPTION SCHEME

APPENDIX

• (b) Subject to the provisions of the 2002 Share Option Scheme, the Board may in its absolute discretion when offering the grant of an Option impose any conditions, restrictions or limitations in relation thereto in addition to those set forth in the 2002 Share Option Scheme as the Board may think fit (to be stated in the letter containing the offer of the grant of the Option) including (without prejudice to the generality of the foregoing) continuing eligibility criteria, conditions, restrictions or limitations relating to the achievement of performance, operating or financial targets by the Company and/or the Grantee, the satisfactory performance or maintenance by the Grantee of certain conditions or obligations or the time or period when the right to exercise the Option in respect of all or some of the Option Shares shall vest.

(4) Subscription Price of Shares

The Subscription Price in respect of any particular Option under the 2002 Share Option Scheme shall be such price as the Board may in its absolute discretion determine at the time of grant of the relevant Option (and shall be stated in the letter containing the offer of the grant of the Option) but the Subscription Price shall not be less than whichever is the highest of (a) the nominal value of a Share; (b) the closing price of the Shares as stated in HKSE’s daily quotations sheet on the Offer Date; and (c) the average of the closing prices of the Shares as stated in HKSE’s daily quotations sheet for the five Business Days immediately preceding the Offer Date.

The Subscription Price shall also be subject to adjustment in accordance with paragraph (16) of this Appendix.

(5) Maximum number of Shares

• (a) Upon adoption of the 2002 Share Option Scheme by the Company in general meeting, the maximum number of Shares which may be issued upon exercise of all Options to be granted under the 2002 Share Option Scheme (and under any Other Share Option Scheme) shall not in aggregate exceed 10 per cent. of the Shares in issue as at the Adoption Date (the “Scheme Mandate Limit”) provided that:

• (i) the Company may at any time as the Board may think fit seek approval from its shareholders to refresh the Scheme Mandate Limit, save that the maximum number of Shares which may be issued upon exercise of all Options to be granted under the 2002 Share Option Scheme (and under any Other Share Option Scheme) shall not exceed 10 per cent. of the Shares in issue as at the date of approval by the shareholders of the Company in general meeting where such limit is refreshed. Options previously granted under the 2002 Share Option Scheme and any Other Share Option Scheme (including those outstanding, cancelled, and lapsed in accordance with the terms of

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SUMMARY OF THE PRINCIPAL TERMS OF THE 2002 SHARE OPTION SCHEME

APPENDIX

the 2002 Share Option Scheme or any Other Share Option Scheme or exercised options under the said schemes) shall not be counted for the purpose of calculating the limit as refreshed. The Company must send a circular containing the information required under Rule 17.02(2)(d) and the disclaimer required under Rule 17.02(4) of the Listing Rules to its shareholders. In addition, the Company may seek separate approval from its shareholders in general meeting for granting Options beyond the Scheme Mandate Limit, provided that the Options in excess of the Scheme Mandate Limit are granted only to the Eligible Persons specified by the Company before such approval is sought and for whom specific approval is obtained. The Company shall issue a circular to its shareholders containing the information required under Rule 17.03(3) of the Listing Rules; and

• (ii) for the avoidance of doubt, Shares which may be issued upon the exercise of all Options granted under the Existing Share Option Scheme and outstanding as at the Adoption Date shall not be included in the calculation of the Scheme Mandate Limit as at the Adoption Date.

• (b) Notwithstanding paragraph (a) above, the maximum number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the 2002 Share Option Scheme (and under any Other Share Option Scheme) shall not exceed 30 per cent. of the Shares in issue from time to time.

• (c) The maximum number of Shares issued and to be issued upon exercise of the Options granted to any one Eligible Person (including exercised and outstanding Options) in any 12-month period shall not exceed 1 per cent. of the Shares in issue from time to time. Where any further grant of Options to such an Eligible Person would result in the Shares issued and to be issued upon exercise of all Options granted and to be granted to such Eligible Person (including exercised, cancelled and outstanding Options) in the 12-month period up to and including the date of such further grant representing in aggregate over 1 per cent. of the Shares in issue, such further grant shall be separately approved by the shareholders of the Company in general meeting with such Eligible Person and his Associates abstaining from voting. The applicable requirements of Rule 17.03(4) shall be complied with.

• (d) The maximum numbers set out in paragraphs (a) to (c) above shall be subject to adjustment in accordance with paragraph (16) of this Appendix but shall not in any event exceed the limits imposed by the Listing Rules.

(6) Maximum number per Grantee who is a connected person

Each grant of Options to a director, chief executive or Substantial Shareholder of the Company or any of their respective Associates under the 2002 Share Option Scheme

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SUMMARY OF THE PRINCIPAL TERMS OF THE 2002 SHARE OPTION SCHEME

APPENDIX

shall be approved by the independent non-executive directors of the Company (excluding an independent non-executive director who is the proposed Grantee). Where a grant of Options to a Substantial Shareholder or an independent non-executive director of the Company or any of their respective Associates would result in the Shares issued and to be issued upon exercise of all Options already granted and to be granted (including Options exercised, cancelled and outstanding) to such person in the 12-month period up to and including the date of grant:

• (a) representing in aggregate over 0.1 per cent. of the Shares in issue; and

• (b) having an aggregate value, based on the closing price of the Shares as stated in HKSE’s daily quotations sheet at the date of each grant, in excess of HK$5 million,

such further grant of Options must be approved by shareholders of the Company. The Company shall send a circular to its shareholders containing the information required under Rule 17.04 of the Listing Rules. All connected persons of the Company (as defined in the Listing Rules) shall abstain from voting at such general meeting, except that any connected person may vote against the relevant resolution at the general meeting provided that his or her intention to do so has been stated in the circular to be sent to the shareholders of the Company. Any vote taken at the meeting to approve the grant of such Options must be taken on a poll.

(7) Time of acceptance and exercise of Option

An offer of grant of an Option may be accepted by an Eligible Person within a period determined by the Directors from time to time. A nominal consideration of HK$1.00 is payable on acceptance of the grant of an Option.

An Option may be exercised at any time during the Option Period in accordance with the terms of the 2002 Share Option Scheme.

(8) Rights are personal to Grantee

An Option shall be personal to the Grantee and shall not be assignable and no Grantee shall in any way sell, transfer, charge, mortgage, encumber or create any interest in favour of any third party over or in relation to any Option or purport to do so. Any breach of the foregoing shall entitle the Company to cancel any outstanding Option or part thereof granted to such Grantee without any compensation.

(9) Rights on ceasing to be an Eligible Person

If (i) the Board in its absolute discretion at any time determines that a Grantee has ceased to be an Eligible Person; or (ii) a Grantee has failed to or no longer satisfies or complies with such criteria or terms and conditions that may be attached to the grant of the Option or which were the basis on which the Option was granted, the Option (to the extent not already exercised) shall lapse on the date on which the Grantee is notified

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thereof (in the case of (i)) or on the date on which the Grantee has failed to or no longer satisfies or complies with such criteria or terms and conditions as aforesaid (in the case of (ii)) and not be exercisable unless the Board otherwise determines in which event the Option (or such remaining part thereof) shall be exercisable within such period as the Board may in its absolute discretion determine following the date of such notification or the date of such failure/non-satisfaction/non-compliance. In the case of (i), a resolution of the Board resolving that the Grantee’s Option has lapsed pursuant to this paragraph shall be final and conclusive.

(10) Rights on death/ceasing employment

• (a) If the Grantee (being an individual) dies or becomes permanently disabled before exercising an Option (or exercising it in full), he (or his legal representative(s)) may exercise the Option up to the Grantee’s entitlement (to the extent not already exercised) within a period of 12 months following his death or permanent disability or such longer period as the Board may determine.

• (b) In the event of the Grantee ceasing to be an Executive by reason of his retirement pursuant to such retirement scheme applicable to the Group at the relevant time, his Option (to the extent not exercised) shall be exercisable until the expiry of the relevant Option Period.

• (c) In the event of the Grantee ceasing to be an Executive by reason of his transfer of employment to an Affiliate Company, his Option (to the extent not exercised) shall be exercisable until the expiry of the relevant Option Period unless the Board in its absolute discretion otherwise determines in which event the Option (or such remaining part thereof) shall be exercisable within such period as the Board has determined.

• (d) If a Grantee, being an executive director of the Company, ceases to be an Executive but remains a non-executive director, his Option (to the extent not already exercised) shall be exercisable until the expiry of the relevant Option Period unless the Board in its absolute discretion otherwise determines in which event the Option (or such remaining part thereof) shall be exercisable within such period as the Board has determined; or if a Grantee, being a non-executive director of the Company, ceases to be a director by reason of Non-Executive Director Retirement, his Option (to the extent not exercised) shall be exercisable until the expiry of the relevant Option Period unless the Board in its absolute discretion otherwise determines in which event the Option (or such remaining part thereof) shall be exercisable within such period as the Board has determined.

(11) Rights on a takeover or a scheme of arrangement

If a general offer (whether by way of takeover offer or scheme of arrangement or otherwise in like manner) is made to all the holders of Shares (or all such holders other

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SUMMARY OF THE PRINCIPAL TERMS OF THE 2002 SHARE OPTION SCHEME

APPENDIX

than the offeror and/or any person controlled by the offeror and/or any person acting in association or concert with the offeror) and such offer becomes or is declared unconditional (in the case of a takeover offer) or is approved by the requisite majorities at the relevant meetings of the shareholders of the Company (in the case of a scheme of arrangement), the Grantee shall be entitled to exercise the Option (to the extent not already exercised) at any time (in the case of a takeover offer) within one month after the date on which the offer becomes or is declared unconditional or (in the case of a scheme of arrangement) prior to such time and date as shall be notified by the Company.

(12) Rights on winding-up

In the event of an effective resolution being passed for the voluntary winding-up of the Company, and if the Grantee immediately prior to such event had any subsisting Option which had not been fully exercised, the Grantee may by notice in writing to the Company within one month after the date of such resolution elect to be treated as if the Option had been exercised immediately before the passing of such resolution either to its full extent or to the extent specified in such notice and shall accordingly be entitled to receive out of the assets available in the liquidation, pari passu with the holders of Shares, such sum as would have been received in respect of the Shares the subject of such election reduced by an amount equal to the Subscription Price which would otherwise have been payable in respect thereof.

(13) Rights attaching to Shares upon exercise of an Option

The Shares to be allotted upon the exercise of an Option shall be subject to all the provisions of the Memorandum of Association and Bye-laws of the Company and the laws of Bermuda in force from time to time and shall rank pari passu in all respects with the then existing fully-paid Shares in issue on the Allotment Date, and accordingly shall entitle the holders to participate in all dividends or other distributions paid or made on or after the Allotment Date, other than any dividend or other distributions previously declared or recommended or resolved to be paid or made if the record date therefor shall be before the Allotment Date. Subject as aforesaid, no Grantee shall enjoy any of the rights of a shareholder by virtue of the grant of an Option pursuant to the 2002 Share Option Scheme.

(14) Lapse of Options

An Option shall lapse automatically and not be exercisable (to the extent not already exercised) on the earliest of the occurrence of any of the following events unless otherwise relaxed or waived (conditionally or unconditionally) by the Board:

• (a) the expiry of the Option Period;

• (b) the expiry of any of the periods referred to in paragraphs (9) to (12) of this Appendix;

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• (c) (subject to the provisions of the 2002 Share Option Scheme) the date of the commencement of the winding-up of the Company;

• (d) there is an unsatisfied judgment, order or award outstanding against the Grantee or the Board has reason to believe that the Grantee is unable to pay or to have no reasonable prospect of being able to pay his/its debts within the meaning of the Bankruptcy Ordinance;

• (e) there are circumstances which entitle any person to take any action, appoint any person, commence proceedings or obtain any order of the type mentioned in the 2002 Share Option Scheme; or

• (f) a bankruptcy order has been made against any director or shareholder of the Grantee (being a corporation) in any jurisdiction.

No compensation shall be payable upon the lapse of any Option, provided that the Board shall be entitled in its discretion to pay such compensation to the Grantee in such manner as it may consider appropriate in any particular case.

(15) Cancellation of Options

The Board shall be entitled for the following causes to cancel any Option in whole or in part by giving notice in writing to the Grantee stating that such Option is thereby cancelled with effect from the date specified in such notice (the “Cancellation Date”):

• (a) the Grantee commits or permits or attempts to commit or permit a breach of paragraph (8) of this Appendix or any terms or conditions attached to the grant of the Option;

• (b) the Grantee makes a written request to the Board for the Option to be cancelled; or

• (c) if the Grantee has, in the opinion of the Board, conducted himself in any manner whatsoever to the detriment of or prejudicial to the interests of the Company or a Subsidiary.

The Option shall be deemed to have been cancelled with effect from the Cancellation Date in respect of any part of the Option which has not been exercised as at the Cancellation Date. No compensation shall be payable upon any such cancellation, provided that the Board shall be entitled in its discretion to pay such compensation to the Grantee in such manner as it may consider appropriate in any particular case. Where the Company cancels an Option held by a Grantee and issues new options to the same Grantee, the issue of such new options may only be made under a share option scheme with available unissued options (excluding the cancelled Option) within the limits set out in paragraph (5) of this Appendix.

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SUMMARY OF THE PRINCIPAL TERMS OF THE 2002 SHARE OPTION SCHEME

APPENDIX

(16) Effects of changes in capital structure

In the event of any change in the capital structure of the Company while any Option may become or remains exercisable, whether by way of a capitalisation of profits or reserves, rights issue, consolidation, subdivision or reduction of the share capital of the Company, the Board may, if it considers the same to be appropriate, direct that adjustments be made to:

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

• (b) the Subscription Price per Share of each outstanding Option; and/or

• (c) the number of Shares subject to the 2002 Share Option Scheme.

Where the Board determines that adjustments are appropriate (other than an adjustment arising from a capitalisation issue), the Auditors or the independent financial adviser appointed by the Board (as the Board may select) shall certify in writing to the Board that any such adjustments are in their opinion fair and reasonable, provided that:

• (i) the aggregate percentage of the issued share capital of the Company available for the grant of Options shall remain as nearly as possible the same as it was before such change but shall not be greater than the maximum number prescribed by the Listing Rules from time to time;

• (ii) any such adjustments shall be made on the basis that the aggregate Subscription Price payable by a Grantee on the full exercise of any Option shall remain as nearly as possible the same as (but shall not be greater than) it was before such event;

• (iii) no such adjustments shall be made the effect of which would be to enable a Share to be issued at less than its nominal value; and

• (iv) any such adjustments shall, as nearly as practicable, be made on the basis that the proportion of the issued share capital of the Company for which any Grantee is entitled to subscribe pursuant to the Options held by him shall remain the same as (but shall not be greater than) that to which he was previously entitled.

For the avoidance of doubt only, the issue of securities as consideration in a transaction shall not be regarded as a circumstance requiring any adjustment.

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SUMMARY OF THE PRINCIPAL TERMS OF THE 2002 SHARE OPTION SCHEME

APPENDIX

(17) Alteration of the 2002 Share Option Scheme

The 2002 Share Option Scheme may be altered in any respect by a resolution of the Board except that the following shall not be carried out except with the prior sanction of an ordinary resolution of the shareholders of the Company in general meeting:

• (a) any material alteration to its terms and conditions or any change to the terms of Options granted (except where the alterations take effect under the existing terms of the 2002 Share Option Scheme);

• (b) any alteration to the provisions of the 2002 Share Option Scheme in relation to the matters set out in Rule 17.03 of the Listing Rules to the advantage of Grantees; and

• (c) any alteration to this paragraph (17),

provided always that the amended terms of the 2002 Share Option Scheme shall comply with the applicable requirements of the Listing Rules.

(18) Period of the 2002 Share Option Scheme/Termination

The 2002 Share Option Scheme shall be valid and effective for a period of 10 years commencing on the Adoption Date. However, the shareholders of the Company in general meeting may by resolution at any time terminate the 2002 Share Option Scheme. Upon the expiry or termination of the 2002 Share Option Scheme as aforesaid, no further Options shall be offered but in all other respects the provisions of the 2002 Share Option Scheme shall remain in full force and effect. All Options granted prior to such expiry or termination (as the case may be) and not then exercised shall continue to be valid and exercisable subject to and in accordance with the 2002 Share Option Scheme.

(19) Conditions of the 2002 Share Option Scheme

The 2002 Share Option Scheme shall come into effect on the Adoption Date upon the fulfilment of the following conditions: (i) the passing of the Ordinary Resolution numbered 1 by the shareholders of the Company at the Special General Meeting; and (ii) HKSE granting approval for the listing of, and permission to deal in, the Shares in the Company to be issued and allotted pursuant to the exercise of the Options in accordance with the terms and conditions of the 2002 Share Option Scheme.

(20) Administration of the 2002 Share Option Scheme

The 2002 Share Option Scheme shall be subject to the administration of the Board whose decision on all matters arising in relation to the 2002 Share Option Scheme or its interpretation or effect shall (save as otherwise provided in the 2002 Share Option Scheme) be final and binding on all parties. The Board may delegate any or all of its powers in relation to the 2002 Share Option Scheme to any of its committees.

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NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting of Kerry Properties Limited (the “Company”) will be held at Island Ballroom, Level 5, Island Shangri-La Hotel, Pacific Place, Supreme Court Road, Central, Hong Kong at 10:45 am on Wednesday, 17 April 2002 (or as soon thereafter as the annual general meeting of the Company convened for the same place and date at 10:30 am shall have been concluded or adjourned) for the purpose of considering and, if thought fit, passing with or without amendments the following resolutions as ordinary resolutions:

ORDINARY RESOLUTIONS

1. “ THAT subject to and conditional upon The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) granting the listing of, and permission to deal in, the ordinary shares of HK$1.00 each in the capital of the Company (or of such other nominal amount as may result from a sub-division, consolidation or reduction of the share capital of the Company from time to time) (the “Shares”) or any part thereof to be issued pursuant to the exercise of any options that may be granted under the share option scheme of the Company (the “2002 Share Option Scheme”), the terms of which are contained in the document marked “A” produced to the meeting and for the purposes of identification signed by the Chairman of the meeting), the 2002 Share Option Scheme be and is hereby approved and adopted as the new share option scheme of the Company and the directors of the Company be and are hereby authorised to do all such acts and to enter into all such transactions, arrangements and agreements as may be necessary or expedient in order to give full effect to the 2002 Share Option Scheme, notwithstanding that they or any of them may be interested in the same, including without limitation to:

2. (a) administer the 2002 Share Option Scheme under which options will be granted to participants eligible under the 2002 Share Option Scheme to subscribe for Shares;

3. (b) modify and/or amend the 2002 Share Option Scheme from time to time provided that such modification and/or amendment is/are effected in accordance with the provisions of the 2002 Share Option Scheme relating to modification and/or amendment and the requirements of the Rules Governing the Listing of Securities on the Stock Exchange;

4. (c) issue and allot from time to time such number of Shares in the capital of the Company as may be required to be issued pursuant to the exercise of the options granted under the 2002 Share Option Scheme provided that the total number of Shares which may be issued upon exercise of all options to be granted under the 2002 Share Option Scheme and any other share option schemes of the Company shall not exceed ten (10) per cent. of the relevant class of the issued share capital of the Company as at the date of passing

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NOTICE OF SPECIAL GENERAL MEETING

this resolution (the “Scheme Mandate Limit”), with the acknowledgement that the Company may seek an approval from its shareholders in general meeting to refresh the Scheme Mandate Limit from time to time but provided always that the maximum number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the 2002 Share Option Scheme and any other share option schemes of the Company shall not in aggregate exceed thirty (30) per cent. of the issued share capital of the Company from time to time; and

• (d) make application at the appropriate time or times to the Stock Exchange and any other stock exchanges upon which the issued Shares may be listed at the relevant time for the listing of, and permission to deal in, any Shares or any part thereof that may hereafter from time to time be issued and allotted pursuant to the exercise of the options granted under the 2002 Share Option Scheme.”

• “ THAT subject to and conditional upon the passing of ordinary resolution numbered 1 set out in this notice of which this resolution forms part and the condition referred to therein being satisfied or fulfilled, the existing executive share option scheme adopted by the Company on 27 March 1997 (the “1997 Share Option Scheme”) be and is hereby terminated with effect from the conclusion of this meeting such that thereafter no further options shall be offered but the options which had been granted during the life of the 1997 Share Option Scheme shall continue to be valid and exercisable in accordance with their terms of issue and in all other respects the provisions of the 1997 Share option Scheme shall remain in full force and effect.”

By Order of the Board Kerry Properties Limited Chow Yin Ping, Anita Company Secretary

Hong Kong, 26 March 2002

Head Office and Principal Place of Business in Hong Kong: 13th & 14th Floors Cityplaza 3, 14 Taikoo Wan Road Taikoo Shing, Hong Kong

Notes:

1. Every member entitled to attend and vote at the above meeting (or at any adjournment thereof) is entitled to appoint up to two individuals as his proxies to attend and vote instead of him. A proxy need not be a member of the Company. The number of proxies appointed by a clearing house (or its nominee) is not subject to the aforesaid limitation.

2. Where there are joint registered holders of any share, any one of such persons may vote at the above meeting (or at any adjournment thereof), either personally or by proxy, in respect of such share as if he were solely entitled thereto; but if more than one of such joint holders be present at the meeting personally or by proxy, that one of the said persons so present whose name stands first on the registers of members of the Company in respect of such share will alone be entitled to vote in respect thereof. Several executors or administrators of a deceased member, and several trustees in bankruptcy or liquidators of a member in whose name any share stands will for this purpose be deemed joint holders thereof.

3. A form of proxy of the above meeting is enclosed. In order to be valid, the form of proxy, together with the power of attorney or other authority (if any) under which it is signed (or a notarially certified copy of that power or authority), must be deposited at Abacus Share Registrars Limited, the Company’s branch share registrars in Hong Kong, of 5th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong not less than 48 hours before the time appointed for holding the above meeting and in default thereof the form of proxy and such power of attorney or other authority shall not be treated as valid.

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(Incorporated in Bermuda with limited liability)

FORM OF PROXY FOR SPECIAL GENERAL MEETING

I/We [(Note 1)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . being the registered holder(s) of [(Note 2)] . . . . . . . . . . . . . . . . . . . . . . . . . shares of HK$1.00 each in the capital of Kerry Properties Limited (the “Company”) HEREBY APPOINT [(Note 3)] the Chairman of the meeting( [(Note 4)] who represents . . . . . . . . . . . . . . . . . . . . . shares held by me/us) [(Note 3)] and/or . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( [(Note 4)] who represents . . . . . . . . . . . . . . . . . . . . . . . . . . . shares held by me/us) [(Note3)] and /or . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( [(Note 4)] who represents . . . . . . . . . . . . . . . . . . . . . . . . . shares held by me/us), as my/our proxy(ies) to act for me/us at the special general meeting (or at any adjournment thereof) of the Company to be held at Island Ballroom, Level 5, Island Shangri-La Hotel, Pacific Place, Supreme Court Road, Central, Hong Kong at 10:45 a.m. on Wednesday, 17 April 2002 (the “Special General Meeting”) (or as soon thereafter as the annual general meeting of the Company convened for the same place and date at 10:30 a.m. shall have been concluded or adjourned) for the purposes of considering and, if thought fit, passing the resolutions as set out in the notice convening the abovesaid meeting and at the Special General Meeting, to vote for me/us and in my/our name(s) in respect of the said resolutions as hereunder indicated or, if no such indication is given, as my/our proxy(ies) thinks/think fit. For the purpose of voting on a show of hands, [(Note 4)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . shall be my/our voting proxy.

ORDINARY RESOLUTIONS	FOR(Note 5)	AGAINST(Note 5)
1. To approve and adopt the 2002 share option scheme and authorise the directors of the Company to do all things necessary to implement the said scheme.
2. To approve the termination of the existing executive share option scheme of the Company.
Dated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2002 Signature_(Note 6)_ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notes :

1. Please insert full name(s) and address(es) in BLOCK CAPITALS.

2. Please insert the number of shares registered in your name(s). If no number is inserted, this form of proxy will be deemed to relate to all the shares in the Company registered in your name(s). Subject to Note 4 below in relation to a clearing house, a member may only have one form of proxy valid at any one time and if any one member submits more than one form of proxy, the last form of proxy received in the manner described in Note 7 below shall be treated as the only valid form of proxy.

3. Every member entitled to attend and vote at the Special General Meeting is entitled to appoint up to two individuals as his proxies to attend and vote instead of him. A proxy need not be a member of the Company. Please delete where necessary so that a maximum of two named persons are identified as your proxies. In the event that two persons (in addition to the Chairman of the meeting) are named as proxies and the words “the Chairman of the meeting” (and all references to shares in respect of which he shall have been appointed) are not deleted, the Chairman shall be deemed to have been deleted. The number of proxies appointed by a clearing house (or its nominee) is not subject to the aforesaid limitation.

4. If you appoint more than one proxy to represent you, please also insert the number of shares which each proxy represents and the name of the proxy designated as the voting proxy for the purpose of a vote on a show of hands. A clearing house is not required to designate which proxy is entitled to vote on a show of hands. If you fail to specify the number of shares which each proxy represents and/or the name of the voting proxy, then, subject to the absolute discretion of the Chairman of the meeting to decide otherwise, you shall be deemed to have appointed the first-named proxy (including the Chairman of the meeting, but subject to Note 3 above) as your voting proxy and that such first-named proxy shall represent all the shares held by you. If you are appointing only one proxy, then you are not required to state the number of shares which that proxy represents and, in such case, the number of shares represented shall be all the shares in the Company registered in your name(s).

5. IMPORTANT: IF YOU WISH TO VOTE FOR THE RESOLUTION(S), TICK IN THE BOX(ES) MARKED “FOR”. IF YOU WISH TO VOTE AGAINST THE RESOLUTION(S), TICK IN THE BOX(ES) MARKED “AGAINST”. Failure to complete the boxes will entitle your proxy(ies) to cast his/their vote(s) at his/their discretion. On a show of hands, a member is entitled to one vote. On a poll, a member is entitled to one vote for every share held and a member entitled to more than one vote need not use all his votes in the same way. A tick in the relevant box indicates that the votes attached to all the shares stated above as held by you will be cast accordingly and a number in the relevant box indicates that the votes attached to the number of shares referred to in the box will be cast accordingly. The total number of shares referred to in the two boxes for the same resolution cannot exceed the number of shares stated above as held by you. Where numbers are referred to in both boxes for the same resolution, the voting proxy will vote on a show of hands according to the box with larger number or, in case of a equal number for both boxes, the voting proxy will cast his vote at his discretion.

6. This form of proxy must be signed by you or your attorney duly authorised in writing, or, in the case of a corporation, must be either under seal or under the hand of an officer or attorney duly authorised.

7. In order to be valid, this form of proxy, together with the power of attorney or other authority (if any) under which it is signed (or a notarially certified copy of that power or authority), must be deposited at Abacus Share Registrars Limited, the Company’s branch share registrars in Hong Kong, of 5th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong not less than 48 hours before the time appointed for holding the Special General Meeting.

8. Where there are joint registered holders of any share, any one of such persons may vote at the Special General Meeting, either personally or by proxy, in respect of such share as if he were solely entitled thereto; but if more than one of such joint holders be present at the Special General Meeting personally or by proxy, that one of the said persons so present whose name stands first on the registers of members of the Company in respect of such share will alone be entitled to vote in respect thereof. Several executors or administrators of a deceased member, and several trustees in bankruptcy or liquidators of a member in whose name any share stands will for this purpose be deemed joint holders thereof.

9. Completion and deposit of this form of proxy will not preclude you from attending and voting at the Special General Meeting if you so wish.