Kerry Properties Limited — Proxy Solicitation & Information Statement 2013

Oct 15, 2013

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a licensed securities dealer, a 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, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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website: www.kerryprops.com (Stock Code: 00683)

PROPOSED ADOPTION OF SHARE OPTION SCHEMES BY KERRY LOGISTICS NETWORK LIMITED AND

PROPOSED AMENDMENTS TO BYE-LAWS

AND NOTICE OF SPECIAL GENERAL MEETING

Resolutions will be proposed at the 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 on Friday, 1 November 2013 at 3:00 p.m. to approve the matters referred to in this circular.

The notice convening the Special General Meeting together with the form of proxy for use at the Special General Meeting are enclosed with this circular. Whether or not you are able to attend the meeting, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to Tricor Abacus Limited, the Company’s branch share registrar and transfer office in Hong Kong, of 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the Special General Meeting.

• for identification purpose only

16 October 2013

CONTENTS

			Page
Definitions . . . . . . . . . . . . . . . . . . .		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . .		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
1.	Introduction . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
2.	Adoption of Share Option	Schemes
	by Kerry Logistics Network Limited . . . . . . . . . . . . . . . . . . . . . . . . . . .		7
3.	Amendments to the Bye-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		11
4.	Voting by Poll . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
5.	Special General Meeting .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
6.	Recommendation . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
7.	Responsibility Statement	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
**Appendix **	I – Summary of the Principal Terms of the Proposed Share
	Option Schemes	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
**Notice of **	Special General Meeting	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27

– i –

DEFINITIONS

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

• “Adoption Date”

• the date on which the KLN 2013 Pre-IPO Share Option Scheme or the KLN 2013 Share Option Scheme, as applicable, is adopted by resolution of KLN in general meeting;

• “Allotment Date” the date on which KLN Shares are allotted to a Grantee pursuant to an option granted and exercised under the KLN 2013 Pre-IPO Share Option Scheme or the KLN 2013 Share Option Scheme, as applicable;

• “Associate” shall have the meaning ascribed to it under the Listing Rules;

• “Auditors” the auditors of KLN 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;

• “Business Day”

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

• “Bye-laws”

• the bye-laws of the Company, as amended from time to time;

• “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 KLN 2013 Pre-IPO Share Option Scheme or the KLN 2013 Share Option Scheme, as applicable;

• “Company”

• Kerry Properties Limited, an exempted company incorporated in Bermuda with limited liability, the shares of which are listed on the Main Board of the Stock Exchange;

• “Connected Persons” shall have the meaning ascribed to it under the Listing Rules;

– 1 –

DEFINITIONS

• “Culpable Termination”

• termination of the employment of an Executive on the grounds that he has been guilty of serious misconduct, or there exist grounds allowing his summary dismissal under his employment contract or under common law, or he is unable or has no reasonable prospects of being able to pay his debts within the meaning of the Bankruptcy Ordinance or any other applicable law, or he has become otherwise insolvent or has made any arrangements or compositions with his creditors generally, or he has been convicted of any criminal offence involving his integrity or honesty;

• “Director(s)” the director(s) of the Company;

• “Distribution”

• the proposed distribution in specie of KLN Shares to qualifying Shareholders if the Proposed Spin-off proceeds;

• “Eligible Person”

• 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 KLN Group;

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

• (d) 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 KLN Group; or

• (e) 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 KLN 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 KLN Group;

– 2 –

DEFINITIONS

• “Final Offer Price”

• “Global Offering”

• “Grantee”

• “HK$”

• “Hong Kong”

• “IFA”

• “KLN”

• “KLN Board”

• “KLN Directors”

• “KLN Group”

• “KLN 2013 Pre-IPO Share Option Scheme”

• “KLN 2013 Share Option Scheme”

the final price at which the KLN Shares are being offered and issued to investors in the Global Offering;

the initial public offering of the KLN Shares to investors comprising a Hong Kong public offering and an offering to institutional and professional investors;

any Eligible Person who accepts the offer of the grant of an option in accordance with the terms of the KLN 2013 Pre-IPO Share Option Scheme and/or the KLN 2013 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;

Hong Kong dollars, the lawful currency of Hong Kong;

Hong Kong Special Administrative Region of the PRC;

the independent financial adviser appointed by the KLN Board for the purposes set out in paragraph 12 of Appendix I to this circular;

Kerry Logistics Network Limited, a direct wholly-owned subsidiary of the Company, which was incorporated in the British Virgin Islands and continued into Bermuda as a Bermuda exempted company with limited liability;

• the board of directors of KLN;

• the directors of KLN;

• KLN and its subsidiaries;

• the 2013 Pre-IPO Share Option Scheme of KLN proposed to be approved by the Shareholders at the Special General Meeting, the principal terms of which are summarised in Part A of Appendix I to this circular;

• the 2013 Post-IPO Share Option Scheme of KLN proposed to be approved by the Shareholders at the Special General Meeting, the principal terms of which are summarised in Part B of Appendix I to this circular;

– 3 –

DEFINITIONS

• “KLN Shares”

ordinary shares in the share capital of KLN;

• “KLN Shareholder(s)” holder(s) of KLN Shares;

• “Latest Practicable Date”

• 11 October 2013, being the latest practicable date for ascertaining certain information referred to in this circular prior to the printing of this circular;

• “Listing”

• the listing and commencement of dealing of the KLN Shares on the Main Board of the Stock Exchange;

• “Listing Approval”

• the approval by the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, KLN Shares on the Main Board of the Stock Exchange;

• “Listing Date” the date of the Listing;

• “Listing Rules” The Rules Governing the Listing of Securities on the Stock Exchange, as amended from time to time;

• “Non-executive Director Retirement”

• a non-executive KLN Director who retires pursuant to the provisions of the bye-laws of KLN and who notifies KLN that he/she is not offering himself/herself up for reelection at KLN’s special general meeting;

• “Offer Date”

• the date of resolutions by the KLN Board approving the grant of options, which must be a Business Day;

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

• “PN15”

• Practice Note 15 of the Listing Rules;

• “PRC”

• the People’s Republic of China;

• “Proposed Share Option Schemes”

• the KLN 2013 Pre-IPO Share Option Scheme and the KLN 2013 Share Option Scheme;

• “Proposed Spin-off”

• the proposed spin-off of KLN by way of a separate listing of KLN Shares on the Main Board of the Stock Exchange;

– 4 –

DEFINITIONS

• “Shareholder(s)”

• “Special General Meeting”

• “Stock Exchange”

• “Subscription Price”

• “Subsidiary”

• “Substantial Shareholder”

• “Supplementary Guidance”

• “Underwriters”

• holder(s) of share(s) in the Company;

• the 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 on Friday, 1 November 2013 at 3:00 p.m.;

The Stock Exchange of Hong Kong Limited;

• the price per KLN Share at which a Grantee may subscribe for KLN Shares on the exercise of an option pursuant to the KLN Pre-IPO 2013 Share Option Scheme or the KLN 2013 Share Option Scheme, as applicable, as set out in paragraph 6 of Appendix I to this circular;

• a subsidiary (within the meaning of the Companies Ordinance (Chapter 32 of the laws of Hong Kong) as amended from time to time) of the Company from time to time;

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

• Supplementary Guidance attached to the letter from the Stock Exchange dated 5 September 2005 and any guidance and interpretation issued from time to time by the Stock Exchange relating to share option schemes; and

the underwriters of the Global Offering.

– 5 –

LETTER FROM THE BOARD

website: www.kerryprops.com (Stock Code: 00683)

Executive Directors:

Mr. WONG Siu Kong (Chairman) Mr. HO Shut Kan (Co-Managing Director) Mr. QIAN Shaohua (Co-Managing Director)

Mr. MA Wing Kai, William Mr. CHAN Wai Ming, William Mr. Bryan Pallop GAW

Independent Non-executive Directors:

Mr. LAU Ling Fai, Herald Mr. KU Moon Lun Ms. WONG Yu Pok, Marina, JP Mr. CHANG Tso Tung, Stephen

Registered Office:

Canon’s Court 22 Victoria Street Hamilton HM12 Bermuda

Head Office and Principal Place of Business in Hong Kong:

25/F, Kerry Centre 683 King’s Road Quarry Bay Hong Kong

16 October 2013

To the Shareholders and, for information only, the Option-holders of Kerry Properties Limited.

Dear Sir or Madam,

PROPOSED ADOPTION OF SHARE OPTION SCHEMES BY KERRY LOGISTICS NETWORK LIMITED AND

PROPOSED AMENDMENTS TO BYE-LAWS AND NOTICE OF SPECIAL GENERAL MEETING

1. INTRODUCTION

Reference is made to the announcement of the Company dated 24 September 2013, in which the Board announced, inter alia , the following:

• for identification purpose only

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LETTER FROM THE BOARD

• (i) the Company had submitted a spin-off proposal to the Stock Exchange in accordance with PN15 in relation to the Proposed Spin-off and obtained the Stock Exchange’s confirmation to proceed with the Proposed Spin-off;

• (ii) KLN had submitted through its appointed joint sponsors a listing application form (Form A1) to the Stock Exchange to apply for the Listing Approval on 24 September 2013;

• (iii) to give due regard to the interests of Shareholders in accordance with the requirements of PN15, the Board proposed to provide qualifying Shareholders with an assured entitlement to KLN Shares by way of the Distribution;

• (iv) in view of the Distribution, certain amendments to the relevant provisions of the Bye-laws had been proposed to be made; and

• (v) details of the proposed amendments to the Bye-laws and the Proposed Share Option Schemes would be set out in a circular to be despatched to the Shareholders together with a notice of the Special General Meeting.

In accordance with the Listing Rules and the Bye-laws, the Board will propose to seek the Shareholders’ approval at the Special General Meeting for the proposed amendments to the Bye-laws as referred to in (iv) by way of a special resolution and the proposed adoption of the Proposed Share Option Schemes by KLN as referred to in (v) by way of an ordinary resolution. The purpose of this circular is to provide you with information regarding the two resolutions to be proposed to you for approval and to give you the notice of the Special General Meeting.

The listing of KLN Shares pursuant to the Proposed Spin-off is subject to, among other things, the Listing Approval and the final decisions of the Board and of the KLN Board. Accordingly, Shareholders and potential investors in the Company should be aware that there is no assurance that the Proposed Spin-off and the separate listing of KLN Shares will take place or as to when it may take place. If the Proposed Spin-off does not proceed for any reason, the Distribution will not be made. Shareholders and potential investors in the Company should therefore exercise caution when dealing in or investing in the securities of the Company.

2. ADOPTION OF SHARE OPTION SCHEMES BY KERRY LOGISTICS NETWORK LIMITED

An ordinary resolution will be proposed to the Shareholders at the Special General Meeting for two share option schemes to be adopted by KLN, namely, the KLN 2013 Pre-IPO Share Option Scheme and the KLN 2013 Share Option Scheme.

– 7 –

LETTER FROM THE BOARD

Since KLN is a direct wholly-owned Subsidiary of the Company, each of the Proposed Share Option Schemes constitutes a share option scheme governed by Chapter 17 of the Listing Rules and, insofar as the Company is concerned, the adoption of the Proposed Share Option Schemes by KLN is subject to the Shareholders’ approval in accordance with Rule 17.01(4) of the Listing Rules.

The purpose of the Proposed Share Option Schemes is to motivate Eligible Persons to optimise their future contributions to the KLN Group and/or to reward them for their past contributions, to 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 KLN Group, and additionally in the case of Executives, to enable the KLN Group to attract and retain individuals with experience and ability and/or to reward them for their past contributions. The KLN 2013 Pre-IPO Share Option Scheme is proposed to be adopted prior to completion of the Proposed Spin-off for KLN to grant options in recognition of the contributions of certain Eligible Persons to the growth of the KLN Group and to incentivise them to continue to contribute to the KLN Group. The KLN 2013 Pre-IPO Share Option Scheme would allow the Grantees of options granted under this scheme to benefit from an increase in share price (if any) of the KLN Shares on and after the Listing Date, which would assist in retaining, incentivizing and rewarding such Grantees.

The Proposed Share Option Schemes do not stipulate either a minimum period for which an option must be held or any performance target a Grantee is required to achieve before an option may be exercised. However, under the Proposed Share Option Schemes, the KLN Board may at its discretion specify any conditions which must be satisfied before any option may be exercised in the offer letter for the grant of the option. This discretion allows the KLN Board to provide incentive and reward to selected Eligible Persons as it thinks fit.

As at the Latest Practicable Date, the KLN Group had not adopted any share option scheme.

Application will be made by KLN for the Listing Approval in respect of the KLN Shares to be issued upon the exercise of the options which may be granted under the Proposed Share Option Schemes.

Subject to the Shareholders’ approval at the Special General Meeting, the KLN 2013 Pre-IPO Share Option Scheme will come into effect on the Adoption Date and expire on the Listing Date. After the commencement of dealings in KLN Shares on the Main Board of the Stock Exchange, no further options shall be granted under the KLN 2013 Pre-IPO Share Option Scheme. Any options to be granted under the KLN 2013 Pre-IPO Share Option Scheme will only become exercisable upon:

• (i) the Listing Approval being granted in respect of the KLN Shares to be issued upon the exercise of the options which may be granted under the Proposed Share Option Schemes; and

• (ii) the commencement of dealings in the KLN Shares on the Main Board of the Stock Exchange.

– 8 –

LETTER FROM THE BOARD

((i) and (ii) together, the “ Conditions ”).

If the Listing does not take place by 31 December 2014, any options granted under the KLN 2013 Pre-IPO Share Option Scheme will lapse automatically.

In order to comply with the requirement of Note (2) to Rule 17.03(9) of the Listing Rules regarding the Subscription Price of options to be granted by KLN before the Listing Date, (a) the Subscription Price of the options to be granted under the KLN 2013 Pre-IPO Share Option Scheme will be the Final Offer Price, which is equal to the new issue price as required under Note (2) to Rule 17.03(9) of the Listing Rules; and (b) no adjustment will be allowed to such effect that the Subscription Price of any options granted under the KLN 2013 Pre-IPO Share Option Scheme is lower than the new issue price (i.e., the Final Offer Price) as required under Note (2) to Rule 17.03(9) of the Listing Rules. The Final Offer Price cannot be determined at the time options are granted under the KLN 2013 Pre-IPO Share Option Scheme as the Final Offer Price will only be agreed between KLN and the Underwriters on or around the expected price determination date specified in the prospectus to be issued by KLN for the Global Offering or such other date as agreed between KLN and the Underwriters. The Company will make an announcement once the Final Offer Price has been determined between KLN and the Underwriters and announced by KLN, should the Global Offering proceed.

Subject to the Shareholders’ approval at the Special General Meeting and fulfilment of the Conditions, the KLN 2013 Share Option Scheme will come into effect on the Listing Date. No options shall be granted under the KLN 2013 Share Option Scheme prior to the commencement of dealings in KLN Shares on the Main Board of the Stock Exchange. The Subscription Price of the options to be granted under the KLN 2013 Share Option Scheme will be determined by the KLN Directors in accordance with and to the extent permissible under Chapter 17 of the Listing Rules.

According to Note (1) of Rule 17.03(3) of the Listing Rules, the total number of securities to be issued upon exercise of all options which may be granted under a share option scheme and any other schemes of KLN must not in aggregate exceed 10% (the “ General Scheme Limit ”) of the relevant class of securities of KLN in issue as at the date of approval of such scheme. As at the Latest Practicable Date, KLN had an aggregate number of 500,000 KLN Shares in issue. Its current issued share capital is expected to remain unchanged between the Latest Practicable Date and the Adoption Date of the KLN 2013 Pre-IPO Share Option Scheme. KLN intends to adopt the Proposed Share Option Schemes for granting options over its new shares after the Listing. KLN 2013 Share Option Scheme will not take effect until the Listing. Despite the KLN 2013 Pre-IPO Share Option Scheme will take effect on the Adoption Date, none of the options to be granted thereunder will be exercisable before the Listing. In other words, the KLN 2013 Pre-IPO Share Option Scheme does not serve any meaningful purpose for the Grantees unless the KLN Shares are listed on the Main Board of the Stock Exchange. Taking into consideration the fact that (i) the Proposed Share Option Schemes are conditional upon Listing as described above; and (ii) the significant difference of the number of KLN Shares in issue between the Adoption Date and the Listing Date, it would be unreasonable to set a 10% limit of the Proposed Share Option Schemes as required by Note (1) to Rule 17.03(3)

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LETTER FROM THE BOARD

of the Listing Rules given the issued share capital of KLN as at the Adoption Date will be 500,000 only whilst the KLN Shares in issue at the time of the Listing will be significantly higher. The Company has therefore applied for and the Stock Exchange has granted a waiver from strict compliance with the requirement under Note (1) to Rule 17.03(3) of the Listing Rules to set the General Scheme Limit on the basis of the total number of KLN Shares in issue on the Listing Date.

Since the Final Offer Price cannot be determined at the time options are granted under the KLN 2013 Pre-IPO Share Option Scheme and will only be agreed between KLN and the Underwriters at a later stage of the Global Offering, the Company has also applied for and the Stock Exchange has granted a waiver from strict compliance with the requirement under Rule 17.06A(2) of the Listing Rules. Pursuant to such waiver, to the extent any options are granted under the KLN 2013 Pre-IPO Share Option Scheme and an announcement is required to be made by the Company pursuant to Rule 17.06A, for the purpose of disclosing the “exercise price of options granted” as required under Rule 17.06A(2), such announcement shall state “Final Offer Price”. As a condition to the waiver of Rule 17.06A(2) of the Listing Rules, the Company will announce the exact amount of the Subscription Price of options granted under the KLN 2013 Pre-IPO Share Option Scheme as required under Rule 17.06A(2) of the Listing Rules once the Final Offer Price is determined.

The Directors consider it inappropriate to value all the options which may be granted under the Proposed Share Option Schemes on the assumption that they were granted on the Latest Practicable Date. The Directors believe that any statement regarding the value of the options as at the Latest Practicable Date will not be meaningful to the Shareholders, taking into account the number of variables which are crucial for the calculation of the option value which have not been determined. Such variables include the Subscription Price, exercise period, any lock-up period, any performance targets set and other relevant variables.

Currently there is no trustee arrangement for the Proposed Share Option Schemes.

As at the Latest Practicable Date, (a) the proposed number of KLN Shares to be issued upon exercise of all options granted, and (b) the list of Grantees, under each of the Proposed Share Option Schemes has not been finalized.

A summary of the principal terms of the Proposed Share Option Schemes is set out in Appendix I to this circular. This serves as a summary of the terms of the Proposed Share Option Schemes but does not constitute the full terms of the same. A copy of each of the Proposed Share Option Schemes is available for inspection during normal business hours at the head office and principal place of business of the Company in Hong Kong at 25/F, Kerry Centre, 683 King’s Road, Quarry Bay, Hong Kong, during the 14-day period immediately preceding the Special General Meeting and at the Special General Meeting.

– 10 –

LETTER FROM THE BOARD

3. AMENDMENTS TO THE BYE-LAWS

A special resolution will be proposed to the Shareholders at the Special General Meeting to amend the Bye-laws.

As announced by the Board on 24 September 2013, should the Proposed Spin-off proceed, the Board proposes to give due regard to the interests of Shareholders as required under PN15 by providing qualifying Shareholders with an assured entitlement to KLN Shares by way of the Distribution. It is proposed that the Bye-laws be amended to expressly provide that dividends can be declared and distributions of assets or funds can be made from the Company’s contributed surplus account.

The legal advisers to the Company as to Hong Kong laws and Bermuda laws have confirmed that the proposed amendments comply with the requirements of the Listing Rules and the applicable laws of Bermuda, respectively. The Company confirms that there is nothing unusual about the proposed amendments for a company listed on the Stock Exchange.

4. VOTING BY POLL

All the resolutions set out in the notice of the Special General Meeting would be decided by poll in accordance with the Listing Rules and the Bye-laws. The chairman of the Special General Meeting would explain the detailed procedures for conducting a poll at the commencement of the Special General Meeting.

The poll results will be published on the Company’s website at www.kerryprops.com and the Stock Exchange’s website at www.hkexnews.hk after the conclusion of the Special General Meeting.

5. SPECIAL GENERAL MEETING

Notice of the Special General Meeting is set out on pages 27 to 30 of this circular. A form of proxy for use at the Special General Meeting is enclosed with this circular. Whether or not you are able to attend the meeting, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to Tricor Abacus Limited, the Company’s branch share registrar and transfer office in Hong Kong, at 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the Special General Meeting. Completion and return of the form of proxy will not prevent you from attending and voting at the Special General Meeting if you so wish.

There is no Shareholder who has any material interest in the adoption of the Proposed Share Option Schemes, and therefore no Shareholder is required to abstain from voting on the ordinary resolution proposed to adopt the Proposed Share Option Schemes.

6. RECOMMENDATION

The Directors consider that the resolutions regarding the proposed amendments to the Bye-laws and the adoption of the Proposed Share Option Schemes by KLN, as set out respectively in the notice of the Special General Meeting, are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of both such resolutions to be proposed at the Special General Meeting.

– 11 –

LETTER FROM THE BOARD

7. 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.

Yours faithfully, For and on behalf of Kerry Properties Limited Wong Siu Kong Chairman

– 12 –

SUMMARY OF THE PRINCIPAL TERMS OF THE PROPOSED SHARE OPTION SCHEMES

APPENDIX I

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

PART A – THE KLN 2013 PRE-IPO SHARE OPTION SCHEME

The principal terms of the KLN 2013 Pre-IPO Share Option Scheme to be proposed at the Special General Meeting are substantially the same as those of the KLN 2013 Share Option Scheme except that:

• (i) the Subscription Price of the options to be granted under the KLN 2013 Pre-IPO Share Option Scheme will be the Final Offer Price;

• (ii) no adjustment will be allowed to such effect that the Subscription Price of any options granted under the KLN 2013 Pre-IPO Share Option Scheme is lower than the new issue price (i.e., the Final Offer Price) as required under Note (2) to Rule 17.03(9) of the Listing Rules;

• (iii) subject to the Shareholders’ approval at the Special General Meeting, the KLN 2013 Pre-IPO Share Option Scheme will come into effect on the Adoption Date;

• (iv) the KLN 2013 Pre-IPO Share Option Scheme will expire on the Listing Date and no options shall be further granted after the commencement of dealings in KLN Shares on the Main Board of the Stock Exchange;

• (v) any options granted under the KLN 2013 Pre-IPO Share Option Scheme will lapse automatically if Listing does not take place by 31 December 2014; and

• (vi) any exercise of the options granted under the KLN 2013 Pre-IPO Share Option Scheme will be subject to (a) the Listing Approval being granted in respect of the KLN Shares to be issued upon the exercise of the options which may be granted under the Proposed Share Option Schemes; and (b) the commencement of dealings in KLN Shares on the Main Board of the Stock Exchange.

PART B – THE KLN 2013 SHARE OPTION SCHEME

1. CONDITIONS AND ADMINISTRATION

• 1.01 The KLN 2013 Share Option Scheme shall come into effect on the Listing Date, subject to:

• (a) the Shareholders’ approval being obtained at the Special General meeting;

– 13 –

SUMMARY OF THE PRINCIPAL TERMS OF THE PROPOSED SHARE OPTION SCHEMES

APPENDIX I

• (b) the Listing Approval being granted in respect of the KLN Shares to be issued upon the exercise of the options which may be granted under the Proposed Share Option Schemes; and

• (c) the commencement of dealings in the KLN Shares on the Main Board of the Stock Exchange.

• 1.02 The KLN 2013 Share Option Scheme shall be subject to the administration of the KLN Board whose decision on all matters arising in relation to the KLN 2013 Share Option Scheme or its interpretation or effect shall (save as otherwise provided in the rules of KLN 2013 Share Option Scheme) be final and binding on all parties thereto. The KLN Board may delegate any or all of its powers in relation to the KLN 2013 Share Option Scheme to any of its committees.

2. PURPOSE

The purpose of the KLN 2013 Share Option Scheme is to motivate Eligible Persons to optimise their future contributions to KLN Group and/or to reward them for their past contributions, to 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 KLN Group, and additionally in the case of KLN Executives, to enable KLN Group to attract and retain individuals with experience and ability and/or to reward them for their past contributions.

3. DETERMINATION OF ELIGIBILITY

• 3.01 The KLN Board may, at its absolute discretion, offer to grant to any Eligible Person an option to subscribe for KLN Shares under the KLN 2013 Share Option Scheme.

• 3.02 The basis of eligibility of any Eligible Person to the grant of any options shall be determined by the KLN Directors from time to time on the basis of their contributions to the development and growth of the KLN Group.

• 3.03 For the avoidance of doubt, the grant of any options by KLN for the subscription of KLN Shares to any person who falls within the definition of Eligible Persons shall not, by itself, unless the KLN Directors otherwise determine, be construed as a grant of options under the KLN 2013 Share Option Scheme.

• 3.04 An Eligible Person or Grantee shall provide the KLN Board such information and supporting evidence as the KLN Board may in its absolute discretion request from time to time (including, without limitation, before the offer of a grant of option, at the time of acceptance of a grant of option, and at the time of exercise of an option) for the purpose of assessing and/or determining his eligibility or continuing eligibility as an Eligible Person and/or Grantee or that of his Associates or for purposes in connection with the terms of an option (and the exercise thereof) or the KLN 2013 Share Option Scheme and the administration thereof.

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APPENDIX I

4. DURATION

The KLN 2013 Share Option Scheme shall be valid and effective for a period of 10 years commencing on the Listing Date. However, the KLN Shareholders in general meeting may by resolution at any time terminate the KLN 2013 Share Option Scheme. Upon the expiry or termination of the KLN 2013 Share Option Scheme as aforesaid, no further options shall be offered but in all other respects the provisions of the KLN 2013 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 terms of the KLN 2013 Share Option Scheme.

5. GRANT OF OPTIONS

• 5.01 On and subject to the terms of the KLN 2013 Share Option Scheme, the KLN Board shall be entitled at any time within a period of 10 years commencing on the Listing Date to offer the grant of any option to any Eligible Person as the KLN 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.

• 5.02 Subject to the provisions of the KLN 2013 Share Option Scheme, the KLN 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 KLN 2013 Share Option Scheme as the KLN 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 KLN 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 KLN Shares which the option relates shall vest.

• 5.03 An offer of the grant of an option shall be deemed to have been accepted when the duplicate letter comprising acceptance of the option duly signed by the Grantee together with a remittance in favour of KLN of HK$1.00 by way of consideration for the grant thereof is received by KLN within the period specified in the letter containing the offer of the grant of the option. Once such acceptance is made, the option shall be deemed to have been granted and to have taken effect from the Offer Date.

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SUMMARY OF THE PRINCIPAL TERMS OF THE PROPOSED SHARE OPTION SCHEMES

APPENDIX I

6. SUBSCRIPTION PRICE OF KLN SHARES

• 6.01 The Subscription Price in respect of any particular option shall be such price as the KLN 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 KLN Share;

• (b) the closing price of KLN Shares as stated in the Stock Exchange’s daily quotations sheet on the Offer Date; and

• (c) the average of the closing prices of KLN Shares as stated in the Stock Exchange’s daily quotations sheet for the five Business Days immediately preceding the Offer Date.

• 6.02 The Subscription Price shall also be subject to adjustment in accordance with paragraph 12 of this Appendix.

7. EXERCISE OF OPTIONS

• 7.01 An option shall be exercised in whole or in part by the Grantee according to the procedures for the exercise of options established by KLN from time to time. Every exercise of an option must be accompanied by a remittance for the full amount of the Subscription Price for the KLN Shares to be issued upon exercise of such option.

• 7.02 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 KLN to cancel, revoke or terminate any outstanding option or part thereof granted to such Grantee without any compensation.

• 7.03 Subject to paragraph 7.05 and any conditions, restrictions or limitations imposed in relation to the particular option pursuant to the provisions of paragraphs 5.02, 9 or 11 and subject as hereinafter provided, an option may be exercised at any time during the Option Period, provided that:

• (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 KLN Board may determine;

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APPENDIX I

• (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 KLN 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 of KLN, his option (to the extent not exercised) shall be exercisable until the expiry of the relevant Option Period unless the KLN 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 KLN Board has determined;

• (d) in the event of the Grantee ceasing to be an Executive for any reason (including his employing company ceasing to be a member of the KLN Group) other than his death, permanent disability, retirement pursuant to such retirement scheme applicable to the KLN Group at the relevant time, transfer of employment to an affiliate company or the termination of his employment with the relevant member of the KLN Group by resignation or Culpable Termination, the option (to the extent not already exercised) shall lapse on the date of cessation of such employment and not be exercisable unless the KLN Board otherwise determines in which event the option (or such remaining part thereof) shall be exercisable within such period as the KLN Board may in its absolute discretion determine following the date of such cessation;

• (e) in the event of the Grantee ceasing to be an Executive by reason of the termination of his employment by resignation or Culpable Termination, the option (to the extent not already exercised) shall lapse on the date on which the notice of termination is served (in the case of resignation) or the date on which the Grantee is notified of the termination of his employment (in the case of Culpable Termination) and not be exercisable unless the KLN Board otherwise determines in which event the option (or such remaining part thereof) shall be exercisable within such period as the KLN Board may in its absolute discretion determine following the date of such service or notification. A resolution of the KLN Board resolving that the Executive’s option has lapsed pursuant to this sub-paragraph shall be final and conclusive;

• (f) (i) if a Grantee being an executive director of KLN 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 KLN 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 KLN Board has determined; or (ii) if a Grantee being a non-executive director of KLN ceases to be a director (aa) by reason of Non-executive Director Retirement, his option (to the extent not exercised)

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SUMMARY OF THE PRINCIPAL TERMS OF THE PROPOSED SHARE OPTION SCHEMES

APPENDIX I

shall be exercisable until the expiry of the relevant Option Period unless the KLN 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 KLN Board has determined; or (ab) for reasons other than Non-executive Director Retirement, the option (to the extent not already exercised) shall lapse on the date of cessation of such appointment and not be exercisable unless the KLN Board otherwise determines in which event the option (or such remaining part thereof) shall be exercisable within such period as the KLN Board may in its absolute discretion determine following the date of such cessation;

• (g) if (i) the KLN 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 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 KLN Board otherwise determines in which event the option (or such remaining part thereof) shall be exercisable within such period as the KLN Board may in its absolute discretion determine following the date of such notification or the date of such failure/nonsatisfaction/non-compliance. In the case of (i), a resolution of the KLN Board resolving that the Grantee’s option has lapsed pursuant to this sub-paragraph shall be final and conclusive;

• (h) if a Grantee (being a corporation) (i) has a liquidator, provisional liquidator, receiver or any person carrying out any similar function appointed anywhere in the world in respect of the whole or any part of the assets or undertaking of the Grantee; or (ii) has suspended ceased or threatened to suspend or cease business; or (iii) is unable to pay its debts (within the meaning of section 178 of the Companies Ordinance or any similar provisions under the Companies Act 1981 of Bermuda as amended from time to time); or (iv) otherwise becomes insolvent; or (v) suffers a change in its constitution, directors, shareholding or management which in the opinion of the KLN Board is material; or (vi) commits a breach of any contract entered into between the Grantee or his Associate and any member of the KLN Group, the option (to the extent not already exercised) shall lapse on the date of appointment of the liquidator or receiver or other similar person or on the date of suspension or cessation of business or on the date when the Grantee is deemed to be unable to pay its debts as aforesaid or on the date of notification by KLN that the said change in constitution, directors, shareholding or management is material or on the date of the said breach of contract (as the case may be) and not be exercisable unless the KLN Board otherwise determines in which event the

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SUMMARY OF THE PRINCIPAL TERMS OF THE PROPOSED SHARE OPTION SCHEMES

APPENDIX I

option (or such remaining part thereof) shall be exercisable within such period as the KLN Board may in its absolute discretion determine following the date of such occurrence. A resolution of the KLN Board resolving that the Grantee’s option has lapsed pursuant to this sub-paragraph by reason of a breach of contract as aforesaid shall be final and conclusive;

• (i) if a Grantee (being an individual) (i) is unable or has no reasonable prospects of being able to pay his debts within the meaning of the Bankruptcy Ordinance or any other applicable law or has otherwise become insolvent; or (ii) has made any arrangements or compositions with his creditors generally; or (iii) has been convicted of any criminal offence involving his integrity or honesty; or (iv) commits a breach of any contract entered into between the Grantee or his Associate and any member of the KLN Group, the option (to the extent not already exercised) shall lapse on the date on which he is deemed unable or to have no reasonable prospects of being able to pay his debts as aforesaid or on the date on which a petition for bankruptcy has been presented in any jurisdiction or on the date on which he enters into the said arrangement or composition with his creditors or on the date of his conviction or on the date of the said breach of contract (as the case may be) and not be exercisable unless the KLN Board otherwise determines in which event the option (or such remaining part thereof) shall be exercisable within such period as the KLN Board may in its absolute discretion determine following the date of such occurrence. A resolution of the KLN Board resolving that the Grantee’s option has lapsed pursuant to this sub-paragraph by reason of a breach of contract as aforesaid shall be final and conclusive;

• (j) 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 KLN Shares (or all such holders other 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 KLN Shareholders (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 KLN;

• (k) in the event of an effective resolution being passed for the voluntary winding-up of KLN, 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 KLN 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

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SUMMARY OF THE PRINCIPAL TERMS OF THE PROPOSED SHARE OPTION SCHEMES

APPENDIX I

such notice and shall accordingly be entitled to receive out of the assets available in the liquidation, pari passu with the holders of KLN Shares, such sum as would have been received in respect of the KLN Shares the subject of such election reduced by an amount equal to the Subscription Price which would otherwise have been payable in respect thereof; and

• (l) if a compromise or arrangement between KLN and its members or creditors is proposed for the purpose of or in connection with a scheme for the reconstruction of KLN or its amalgamation with any other company, KLN shall give notice thereof to the Grantees who have unexercised options at the same time as it dispatches notices to all members or creditors of KLN summoning the meeting to consider such a compromise or arrangement and thereupon each Grantee (or his legal representatives or receiver) may until the expiry of the earlier of: (i) the Option Period; (ii) the period of two months from the date of such notice; and (iii) the date on which such compromise or arrangement is sanctioned by the court, exercise in whole or in part his option. Except insofar as exercised in accordance with this paragraph 7.03(l), all options outstanding at the expiry of the relevant period referred to in this paragraph 7.03(l) shall lapse. KLN may thereafter require each Grantee to transfer or otherwise deal with the KLN Shares issued on exercise of the option to place the Grantee in the same position as would have been the case had such KLN Shares been the subject of such compromise or arrangement, provided that in determining the entitlement of any Grantee to exercise an option at any particular date, the KLN Board may in its absolute discretion relax or waive, in whole or in part, conditionally or unconditionally, any additional conditions, restrictions or limitations imposed in relation to the particular option pursuant to the provisions of paragraph 5.02 and/or deem the right to exercise the option in respect of the KLN Shares the subject thereof to have been exercisable notwithstanding that according to the terms of the particular option such right shall not have then vested.

• 7.04 The KLN Shares to be allotted upon the exercise of an option shall be subject to all the provisions of the memorandum of association and the bye-laws of KLN and the laws of Bermuda in force from time to time and shall rank pari passu in all respects with then existing fully-paid KLN 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 therefore 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 KLN 2013 Share Option Scheme.

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SUMMARY OF THE PRINCIPAL TERMS OF THE PROPOSED SHARE OPTION SCHEMES

APPENDIX I

• 7.05 KLN is entitled to refuse any exercise of an option if such exercise is not in accordance with the terms of the KLN 2013 Share Option Scheme or the procedures for exercise of options established by KLN from time to time or if such exercise may cause KLN to contravene or breach any laws, enactment or regulations for the time being in force in Hong Kong and Bermuda or other jurisdiction where applicable or the Listing Rules or any rules governing the Listing of the KLN Shares on a Stock Exchange.

8. LAPSE OF OPTIONS

• 8.01 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 KLN:

• (a) the expiry of the Option Period;

• (b) the expiry of any of the periods referred to in paragraphs 7.03(a) to (l);

• (c) (subject to paragraph 7.03(k)) the date of the commencement of the winding-up of KLN;

• (d) there is an unsatisfied judgment, order or award outstanding against the Grantee or the KLN 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 paragraph 7.03(h), 7.03(i) or paragraph 8.01(d); or

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

• 8.02 No compensation shall be payable upon the lapse of any option, provided that the KLN 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.

9. MAXIMUM NUMBER OF KLN SHARES AVAILABLE FOR SUBSCRIPTION

• 9.01 The maximum number of KLN Shares to be issued upon exercise of all options which may be granted under the KLN 2013 Share Option Scheme (and under any other share option schemes) shall not in aggregate exceed 10 per cent. of the KLN Shares in issue immediately after completion of the Global Offering and as at the Listing Date (the “ Scheme Mandate Limit ”), provided that KLN may at any time

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SUMMARY OF THE PRINCIPAL TERMS OF THE PROPOSED SHARE OPTION SCHEMES

APPENDIX I

• as the KLN Board may think fit seek approval from the KLN Shareholders to refresh the Scheme Mandate Limit, save that the maximum number of KLN Shares to be issued upon exercise of all options which may be granted under the KLN 2013 Share Option Scheme (and under any other share option schemes of KLN) shall not exceed 10 per cent. of the KLN Shares in issue as at the date of approval by the KLN Shareholders in general meeting where such limit is refreshed. Options previously granted under the KLN 2013 Share Option Scheme and any other share option schemes (including those outstanding, cancelled, and lapsed in accordance with the terms of the KLN 2013 Share Option Scheme or any other share option schemes or exercised options under the said schemes of KLN) shall not be counted for the purpose of calculating the limit as refreshed. KLN shall 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 the KLN Shareholders. In addition, KLN may seek separate approval from the KLN 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 KLN before such approval is sought and for whom specific approval is obtained. KLN shall issue a circular to the KLN Shareholders containing the information required under Rule 17.03(3) of the Listing Rules.

• 9.02 Notwithstanding paragraph 9.01, the maximum number of KLN Shares to be issued upon exercise of all outstanding options granted and yet to be exercised under the KLN 2013 Share Option Scheme (and under any other share option schemes of KLN) shall not exceed 30 per cent. of the KLN Shares in issue from time to time.

• 9.03 The maximum number of KLN 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 one per cent. of the KLN Shares in issue from time to time. Where any further grant of options to such an Eligible Person would result in the KLN Shares issued and to be issued upon exercise of all options granted and which may 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 one per cent. of the KLN Shares in issue, such further grant shall be separately approved by the KLN Shareholders in general meeting with such Eligible Person and his Associates abstaining from voting. The applicable requirements of Rule 17.03(4) of the Listing Rules shall be complied with.

• 9.04 The maximum numbers set out in paragraphs 9.01 to 9.03 above shall be subject to adjustment in accordance with paragraph 12 but shall not in any event exceed the limits imposed by Chapter 17 of the Listing Rules.

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APPENDIX I

10. MAXIMUM NUMBER OF KLN SHARES PER GRANTEE WHO IS A CONNECTED PERSON

• 10.01 Each grant of options to a director, chief executive or Substantial Shareholder of KLN or any of their respective Associates under the KLN 2013 Share Option Scheme shall be approved by independent non-executive directors of KLN (excluding the independent non-executive director of KLN who is the proposed Grantee of the option). Where any grant of options to a Substantial Shareholder or an independent non-executive director of KLN or any of their respective Associates would result in the securities issued and to be issued upon exercise of all options already granted and which may be granted (including options exercised, cancelled and outstanding) to such person in the 12-month period up to and including the date of such grant:

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

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

such further grant of options must be approved by the KLN Shareholders.

• 10.02 KLN shall send a circular to the KLN Shareholders containing the information required under Rule 17.04 of the Listing Rules. All Connected Persons of KLN shall abstain from voting in favour at such general meeting and may be entitled to vote against the relevant resolution provided that his or her intention to do so has been stated in the circular to be sent to the KLN Shareholders. Any vote taken at the meeting to approve the grant of such options must be taken on a poll.

11. CANCELLATION OF OPTIONS

• 11.01 The KLN 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 paragraphs 3.04 or 7.02 of this Appendix or any terms or conditions attached to the grant of the option;

• (b) the Grantee makes a written request to the KLN Board for, or agrees to, the option to be cancelled; or

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

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APPENDIX I

• 11.02 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 KLN 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 KLN 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 the KLN 2013 Share Option Scheme with available unissued options (excluding the cancelled option) within the limit approved by the KLN Shareholders set out in paragraph 9 of this Appendix (so long as KLN remains a Subsidiary of the Company) and, subject to the maximum number of KLN Shares available for subscription referred to in paragraph 9 of this Appendix.

12. REORGANISATION OF CAPITAL STRUCTURE

• 12.01 In the event of any change in the capital structure of KLN 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 KLN, the KLN Board may, if it considers the same to be appropriate, direct that adjustments be made to:

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

• (b) the Subscription Price of each outstanding option; and/or

• (c) the number of KLN Shares subject to the KLN 2013 Share Option Scheme.

• 12.02 Where the KLN Board determines that adjustments are appropriate (other than an adjustment arising from a capitalisation issue), the Auditors or the IFA (as the KLN Board may select) shall certify in writing to the KLN Board that any such adjustments to be in their opinion fair and reasonable and in compliance with Rule 17.03(13) of the Listing Rules (as amended from time to time) and the notes thereto and the Supplemental Guidance, provided that:

• (a) the aggregate percentage of the issued share capital of KLN 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;

• (b) 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;

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APPENDIX I

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

• (d) any such adjustments shall, as nearly as practicable, be made on the basis that the proportion of the issued share capital of KLN 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 (as interpreted in accordance with the Supplementary Guidance as amended from time to time).

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

• 12.04 The capacity of the Auditors or the IFA (as the case may be) in this paragraph 12 is that of experts and not of arbitrators and their certification or confirmation shall, in the absence of manifest error, be final, conclusive and binding on KLN and the Grantees. The costs of the Auditors or the IFA (as the case may be) shall be borne by KLN.

13. DISTRIBUTIONS

Upon distribution by KLN to holders of the KLN Shares of any cash or in specie of assets (other than dividends in the ordinary course) (“ KLN Distribution ”), KLN may make a downward adjustment to the Subscription Price of any option granted but not exercised as at the date of such KLN Distribution by an amount which the KLN Board considers as reflecting the impact such KLN Distribution will have or will likely to have on the trading price of the KLN Shares provided that (i) the KLN Board’s determination of any adjustments shall be final and binding on all Grantees; (ii) the amount of adjustment shall not exceed the amount of such KLN Distribution to be made to the KLN Shareholders; (iii) such adjustment shall take effect on or after the date of such KLN Distribution by KLN; (iv) any adjustment provided for in this paragraph 13 shall be cumulative to any other adjustments contemplated under paragraph 12 or approved by the KLN Shareholders in general meeting; and (v) the adjusted Subscription Price shall not, in any case, be less than the nominal value of the KLN Shares.

14. SHARE CAPITAL

The exercise of any option shall be subject to the KLN Shareholders in general meeting approving any necessary increase in the authorised share capital of KLN. Subject thereto, the KLN Board shall make available sufficient authorised but unissued share capital of KLN to meet subsisting requirements on the exercise of options.

15. DISPUTES

Any dispute arising in connection with the KLN 2013 Share Option Scheme (whether as to the number of KLN Shares, the subject of an option, the amount of the Subscription Price or otherwise) shall be referred to the Auditors or the IFA (as the case may be) for decision, who shall act as experts and not as arbitrators and whose decision shall be final and binding.

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APPENDIX I

16. ALTERATION OF THE KLN 2013 SHARE OPTION SCHEME

The KLN 2013 Share Option Scheme may be altered in any respect by a resolution of the KLN Board except that the following shall not be carried out except with the prior sanction of an ordinary resolution of the KLN Shareholders 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 KLN 2013 Share Option Scheme);

• (b) any alteration to the provisions of the KLN 2013 Share Option Scheme in relation to the matters set out in Rule 17.03 of the Listing Rules;

• (c) any change to the authority of the KLN Directors in relation to any alteration to the terms of the scheme; and

• (d) any alteration to this paragraph 16,

provided always that the amended terms of the KLN 2013 Share Option Scheme shall comply with the applicable requirements of Chapter 17 of the Listing Rules.

17. TERMINATION

KLN by resolution in general meeting may at any time terminate the operation of the KLN 2013 Share Option Scheme. Upon the expiry or termination of the KLN 2013 Share Option Scheme as aforesaid, no further options shall be offered but in all other respects the provisions of the KLN 2013 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 KLN 2013 Share Option Scheme.

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NOTICE OF SPECIAL GENERAL MEETING

website: www.kerryprops.com (Stock Code: 00683)

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 on Friday, 1 November 2013 at 3:00 p.m. for the following purposes:

1. To consider as special business, and if thought fit, pass the following resolution as Ordinary Resolution with or without amendments:

ORDINARY RESOLUTION

THAT the 2013 Pre-IPO Share Option Scheme and the 2013 Share Option Scheme of Kerry Logistics Network Limited, the terms of which are contained in the documents marked “A” and “B”, respectively, and produced to the meeting and for the purpose of identification signed by the chairman of the meeting and summaries of which are set out in the circular of the Company dated 16 October 2013 (the “ Proposed Share Option Schemes ”), be and are hereby approved and any one director of the Company be and is hereby authorised to do all such acts and to enter into all such transactions and arrangements as may be necessary or expedient in order to give effect to the Proposed Share Option Schemes.

1. To consider as special business, and if thought fit, pass the following resolution as Special Resolution:

SPECIAL RESOLUTION

THAT the Bye-laws of the Company be and are amended in the following manner:

1. Bye-law 141

by deleting Bye-law 141 in its entirety and substituting therefor the following new Bye-law 141:

• for identification purpose only

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NOTICE OF SPECIAL GENERAL MEETING

• “141. (A) The Company may by an Ordinary Resolution declare dividends or make distributions out of assets or funds of the Company legally available therefor, including distributions out of contributed surplus, to the shareholders in any currency, but no such dividends or distributions shall exceed the amount recommended by the Board.

• (B) The Board may from time to time make distributions out of assets or funds of the Company legally available therefor, including distributions out of contributed surplus, to the shareholders.”

2. Bye-law 142

by deleting Bye-law 142(B) in its entirety and substituting therefor the following new Bye-law 142(B):

• “(B) The Board may also pay half-yearly or at other suitable intervals to be settled by it any dividend or distribution out of assets or funds of the Company legally available therefor, including distributions out of contributed surplus, to be payable at a fixed rate if the Board is of the opinion that the payment is justified.”

3. Bye-law 143

• (a) by deleting Bye-law 143(A) in its entirety and substituting therefor the following new Bye-law 143(A):

• “(A) No dividend shall be declared or paid and no distribution out of contributed surplus shall be made otherwise than in accordance with the Statutes. No dividend shall be paid otherwise than out of profits or reserves available for distribution.”

• (b) by deleting Bye-law 143(C) in its entirety and substituting therefor the following new Bye-law 143(C):

• “(C) Subject to Bye-laws 143(D) and 146, all dividends, distribution out of contributed surplus and other distributions in respect of shares in the Company shall be stated and discharged, in the case of shares denominated in Hong Kong dollars, in Hong Kong dollars, and in the case of shares denominated in United States dollars, in United States dollars, provided that, in the case of shares denominated in Hong Kong dollars, the Board may determine in the case of any distribution that shareholders may elect to receive the same in United States dollars or any other currency selected by the Board, conversion to be effected at such rate of exchange as the Board may determine.”

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NOTICE OF SPECIAL GENERAL MEETING

4. Bye-law 144

by deleting Bye-law 144 in its entirety and substituting therefor the following new Bye-law 144:

• “144. Notice of the declaration of an interim dividend or a distribution shall be given in such manner as the Board shall determine.”

5. Bye-law 145

by deleting Bye-law 145 in its entirety and substituting therefor the following new Bye-law 145:

• “145. No dividend, distribution or other moneys payable on or in respect of a share shall bear interest as against the Company.”

6. Bye-law 146

by deleting Bye-law 146 in its entirety and substituting therefor the following new Bye-law 146:

“146. Whenever the Board or the Company in general meeting has resolved that a dividend be paid or declared or a distribution be made, the Board may further resolve that such dividend or distribution be satisfied wholly or in part by the distribution of specific assets of any kind and in particular of paid up shares, securities, debentures or warrants to subscribe for securities of the Company or any other company, or in any one or more of such ways, with or without offering any rights to shareholders to elect to receive such dividend or distribution in cash, and where any difficulty arises in regard to the distribution the Board may settle the same as it thinks expedient, and in particular may disregard fractional entitlements or round the same up or down, and may fix the value for distribution of such specific assets, or any part thereof, and may determine that cash payments shall be made to any shareholders upon the footing of the value so fixed in order to adjust the rights of all parties and may determine that fractional entitlements shall be aggregated and sold and the benefit shall accrue to the Company rather than to the shareholders concerned, and may vest any such specific assets in trustees as may seem expedient to the Board and may appoint any person to sign any requisite instruments of transfer and other documents on behalf of the persons entitled to the dividend or distribution and such appointment shall be effective. Where requisite, the Board may appoint any person to sign a contract on behalf of the persons entitled to the dividend or distribution and such appointment shall be effective. The Board may resolve that no such assets shall be made available or paid to shareholders with registered addresses

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NOTICE OF SPECIAL GENERAL MEETING

in any particular territory or territories being a territory or territories where, in the absence of a registration statement or other special formalities, this would or might, in the opinion of the Board, be unlawful or impracticable and in such event the only entitlement of the shareholders aforesaid shall be to receive cash payments as aforesaid. Shareholders affected as a result of the foregoing sentence shall not be or be deemed to be a separate class of shareholders for any purpose whatsoever.”

By Order of the Board Li Siu Ching, Liz Company Secretary

Hong Kong, 16 October 2013

Head Office and Principal Place

of Business in Hong Kong:

25/F, Kerry Centre 683 King’s Road Quarry Bay Hong Kong

Notes:

1. Every member entitled to attend and vote at the above meeting (or at any adjournment thereof) (the “ SGM ”) is entitled to appoint up to two individuals as his proxies. 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 holders of any share, any one of such persons may vote at the SGM, 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 SGM 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.

3. To be valid, a 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 the Company’s branch share registrar and transfer office in Hong Kong, Tricor Abacus Limited, at 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, not less than 48 hours before the time appointed for the holding of the SGM. Completion and return of the form of proxy will not preclude a member from attending the SGM and voting in person if he so wishes.

4. The registers of members of the Company will be closed on Thursday, 31 October 2013 and Friday, 1 November 2013, during which period no transfer of shares will be effected. In order to be entitled to attend and vote at the SGM, all transfers accompanied by the relevant share certificates must be lodged for registration with Tricor Abacus Limited at the above address not later than 4:00 p.m. on Wednesday, 30 October 2013.

5. Shareholders are advised to read the circular to the shareholders of the Company dated 16 October 2013 which contains information concerning the resolutions set out in this notice.

6. All the resolutions to be proposed at the SGM shall be decided by poll.

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