Long Investment Corp — Proxy Solicitation & Information Statement 2007

Jun 25, 2007

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Shui On Construction and Materials Limited (the “Company”), you should at once hand this circular and the accompanying form of proxy to the purchaser, transferee or to the bank, stockbroker 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.

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(Stock Code: 983)

PROPOSED GRANT OF SHARE OPTIONS TO ELIGIBLE PARTICIPANTS UNDER THE EXISTING SHARE OPTION SCHEME IN EXCESS OF 1% ENTITLEMENT

A notice convening a special general meeting of the Company to be held at Room 103, 1st Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong on Thursday, 12 July 2007 at 3:00 p.m. is set out on pages 9 and 10 of this circular. Whether or not you are able to attend the meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the head office of the Company at 34th Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong as soon as possible and, in any event, not later than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting and any adjournment thereof (as the case may be) should you so wish.

* for identification purpose only

26 June 2007

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
NOTICE OF SPECIAL GENERAL MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9

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DEFINITIONS

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

“associate” has the meaning set out in the Listing Rules “Board” the board of Directors or a duly authorised committee thereof “Company” or “SOCAM” Shui On Construction and Materials Limited, a company incorporated in Bermuda with limited liability and whose securities are listed on the Stock Exchange “Directors” the directors of the Company “Existing Share Option Scheme” the share option scheme of the Company adopted on 27 August 2002 “Group” the Company and its subsidiaries “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange, as amended from time to time “SGM” the special general meeting of the Company to be held for approving the grant of share options to the eligible participants in excess of their respective maximum 1% entitlement “Share(s)” share(s) of HK$1.00 each in the issued share capital of the Company “Shareholder(s)” holders of Share(s) in issue “Stock Exchange” The Stock Exchange of Hong Kong Limited “HK$” Hong Kong dollar, the lawful currency of Hong Kong “%” per cent

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LETTER FROM THE BOARD

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(Incorporated in Bermuda with limited liability)

(Stock Code: 983)

Executive Directors: Mr. Lo Hong Sui, Vincent (Chairman) Mr. Choi Yuk Keung, Lawrence (Vice-chairman) Mr. Wong Yuet Leung, Frankie (Chief Executive Officer) Mrs. Lowe Hoh Wai Wan, Vivien

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Non-Executive Director: Professor Michael John Enright

Independent Non-Executive Directors: Mr. Anthony Griffiths Mr. Cheng Mo Chi, Moses Professor K.C. Chan

Head office: 34th Floor Shui On Centre 6-8 Harbour Road Hong Kong

26 June 2007

To the Shareholders

Dear Sirs or Madam,

PROPOSED GRANT OF SHARE OPTIONS TO ELIGIBLE PARTICIPANTS UNDER THE EXISTING SHARE OPTION SCHEME IN EXCESS OF 1% ENTITLEMENT

INTRODUCTION

The Company has adopted the Existing Share Option Scheme on 27 August 2002 for the purpose of motivating the Directors and key executives through share ownership and performance-based incentives.

Under Rule 17.03(4) of the Listing Rules, the total number of Shares issued and to be issued upon the exercise of the options granted to each participant of the Existing Share Option Scheme (including exercised, cancelled and outstanding options) in the 12-month period up to and including the date of further grant must not exceed 1% of the Shares in issue, unless approval of Shareholders is obtained.

* for identification purpose only

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LETTER FROM THE BOARD

On 14 June 2007, the Board decided unanimously on the recommendation of the Remuneration Committee (comprising all the independent non-executive Directors who constitute the majority of that committee) to grant options to three of the eligible participants under the Existing Share Option Scheme in excess of each participant’s maximum 1% entitlement, subject to the approval of Shareholders at the SGM. The purpose of this circular is to give you the information relating to such grant in accordance with Rule 17.03(4) of the Listing Rules. At the SGM, the eligible participants and their associates will abstain from voting on the resolutions approving the grant of such options by the Company.

INFORMATION REQUIRED BY RULE 17.03(4)

• (a) Identity of the eligible participants

• (1) Mr. Choi Yuk Keung, Lawrence (“Mr. Lawrence Choi”), an executive Director and the Vice-chairman of the Company;

• (2) Mr. Wong Yuet Leung, Frankie (“Mr. Frankie Wong”), an executive Director and the Chief Executive Officer of the Company; and

• (3) Mr. Wong Kun To, Philip (“Mr. Philip Wong”), the managing director of SOCAM Asset Management (HK) Limited, a wholly-owned subsidiary of the Company, undertaking the management of the distressed asset development projects of China Central Properties Limited.

(b) Terms of share options previously granted and proposed to be granted

Mr. Lawrence Choi, Mr. Frankie Wong and Mr. Philip Wong have been granted share options under the share option schemes of the Company. The Shares issued and to be issued upon exercise of the options granted to Mr. Lawrence Choi, Mr. Frankie Wong and Mr. Philip Wong (including both exercised and outstanding options) in the 12-month period immediately prior to 14 June 2007 were 3,043,000 Shares, 5,260,000 Shares and 2,800,000 Shares respectively, the details of which are as follows:

	Number of
	underlying
	shares under	Approximate
	exercised and	% of the
	outstanding	**Shares **	in issue	Exercise price
Name	options	on 14 June 2007		per share	Option period
Mr. Lawrence	3,043,000		1.05%	HK$6.00 to	At various periods in
Choi				HK$16.78	respect of different
					batches of share
					options granted, up to
					2 January 2017

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LETTER FROM THE BOARD

	Number of
	underlying
	shares under	Approximate
	exercised and	% of the
	outstanding	Shares in issue	Exercise price
Name	options	on 14 June 2007	per share	Option period
Mr. Frankie	5,260,000	1.81%	HK$6.00 to	At various periods in
Wong			HK$16.78	respect of different
				batches of share
				options granted, up to
				2 January 2017
Mr. Philip	2,800,000	0.96%	HK$16.78	From 3 January 2007 to
Wong				2 January 2012

Certain share options granted to Mr. Lawrence Choi and Mr. Frankie Wong are subject to performance conditions as determined by the Board and set out in their respective offer letters. Apart from the share options granted on 3 January 2007, the share options with vesting subject to performance conditions have vested fully or partly based on the assessment by the Remuneration Committee of the related performance of Mr. Lawrence Choi and Mr. Frankie Wong respectively.

On 3 January 2007, Mr. Lawrence Choi and Mr. Frankie Wong have been granted share options to subscribe for 700,000 Shares and 1,500,000 Shares respectively, subject to the performance conditions imposed by the Board. The vesting of such share options will only occur if the change in the total shareholders’ return (“TSR”) on the Shares is positive and equals or exceeds the Hang Seng Index (“HSI”) TSR, over a performance period of 3 years from 3 January 2007 to 2 January 2010 (“Performance Period”). Change in TSR means principally changes in Share price during the Performance Period with dividends paid in the Performance Period also taken into account. Vesting will be in accordance with the different levels of percentages as set out in a vesting schedule. 30% of the grant will vest if SOCAM TSR is positive and equals HSI TSR, increasing up to 100% if SOCAM TSR equals or is greater than 135% of HSI TSR; vesting is also 100% if SOCAM TSR is positive while HSI TSR is negative. For the measurement of performance, TSR for both the HSI and SOCAM at the start and end dates of the Performance Period will be based on the average TSR of the 3 months before each date.

The share option previously granted to Mr. Philip Wong to subscribe for 2,800,000 Shares is subject to performance condition set by the Board. The vesting of such share option is based on the Distressed Asset Development team performance and individual performance over a performance period of 3 years from 1 January 2007 to 31 December 2009 in accordance with a schedule of vesting percentages ranging from 60% to 100%. Subject to the satisfaction of all the vesting conditions, the share option will vest on 3 January 2010 and be exercisable immediately until expiry of the option period on 2 January 2012.

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LETTER FROM THE BOARD

The terms of the share options proposed to be granted to Mr. Lawrence Choi, Mr. Frankie Wong and Mr. Philip Wong on 14 June 2007 under the Existing Share Option Scheme are as follows:

	Number of	Approximate
	underlying	% of the
	shares under	Shares in issue	Exercise price
Name	proposed option	on 14 June 2007	per share	Option period
			(Note)
Mr. Lawrence	250,000	0.09%	HK$20.96	14 June 2007 to
Choi				13 June 2012
Mr. Frankie	500,000	0.17%	HK$20.96	14 June 2007 to
Wong				13 June 2012
Mr. Philip Wong	200,000	0.07%	HK$20.96	14 June 2007 to
				13 June 2012

Note: HK$20.96 represents the highest of: (a) the closing price of a Share on 14 June 2007, being the date of grant; and (b) the average closing price of the Shares for the 5 business days immediately preceding the date of grant; and (c) the nominal value of a Share.

The aggregate number of Shares issued and to be issued upon exercise of all the options (including both exercised and outstanding options) granted and to be granted to Mr. Lawrence Choi, Mr. Frankie Wong and Mr. Philip Wong in the 12-month period up to and including 14 June 2007 will therefore be 3,293,000 Shares, 5,760,000 Shares and 3,000,000 Shares respectively, assuming such options to be granted are accepted and immediately exercisable. Such Shares represent approximately 1.13%, 1.98% and 1.03% of the Shares in issue as at 14 June 2007 and are in excess of the 1% maximum entitlement of Mr. Lawrence Choi, Mr. Frankie Wong and Mr. Philip Wong respectively under Rule 17.03(4) of the Listing Rules.

(c) Vesting of share options proposed to be granted

The share options proposed to be granted to Mr. Lawrence Choi and Mr. Frankie Wong are subject to the following vesting schedule:

• 20%: 6 months after the date of grant

• 20%: 1st anniversary of the date of grant 20%: 2nd anniversary of the date of grant 20%: 3rd anniversary of the date of grant 20%: 4th anniversary of the date of grant

The vesting of such options is not subject to any performance conditions.

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LETTER FROM THE BOARD

The vesting of the share option proposed to be granted to Mr. Philip Wong is subject to the performance conditions set by the Board. The vesting of the share option is based on the Distressed Asset Development team performance and individual performance over a performance period of 3 years from 1 July 2007 to 30 June 2010 in accordance with a schedule of vesting percentages ranging from 60% to 100%. Subject to the satisfaction of all the vesting conditions, the share option will vest on 1 July 2010 and be exercisable immediately until expiry of the option period on 13 June 2012.

(d) Amount payable upon acceptance of the share options

HK$1.00 is payable by each of Mr. Lawrence Choi, Mr. Frankie Wong and Mr. Philip Wong to the Company on acceptance of the offer of the share options.

(e) Ranking of Shares

The Shares to be allotted upon the exercise of the options proposed to be granted to Mr. Lawrence Choi, Mr. Frankie Wong and Mr. Philip Wong will be subject to all the provisions of the bye-laws of the Company for the time being in force and will rank pari passu in all respects with the fully paid Shares in issue on the date of their allotment and issue, and accordingly will entitle the holders thereof to participate in all dividends or other distributions paid or made on or after the date of allotment and issue other than any dividend or other distribution previously declared or recommended or resolved to be paid or made if the record date therefor shall be before the date of allotment and issue. Shares allotted and issued upon the exercise of an option shall not carry voting rights until the name of the grantee has been duly entered onto the register of members of the Company as the holder thereof.

SPECIAL GENERAL MEETING

A notice convening the SGM to be held at Room 103, 1st Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong on Thursday, 12 July 2007 at 3:00 p.m. is set out on pages 9 and 10 of this circular.

A form of proxy for use at the SGM is enclosed. Whether or not you are able to attend the meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the head office of the Company at 34th Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. Completion and return of the form of proxy will not prevent shareholders from attending and voting at the SGM if they so wish.

As at 22 June 2007, being the latest practicable date prior to the printing of this circular, Mr. Lawrence Choi and Mr. Frankie Wong beneficially owned 1,840,000 Shares and 800,000 Shares respectively, representing approximately 0.62% and 0.27% of the issued share capital of the Company respectively. Mr. Philip Wong did not have any interest in the issued shares of the Company. At the SGM, Mr. Lawrence Choi, Mr. Frankie Wong and Mr. Philip Wong and their respective associates will abstain from voting, in respect of their shareholdings (if any) in the Company on the respective resolutions approving the grant of share options to them. The vote of Shareholders at the SGM will be taken by way of poll in accordance with Rule 13.39(4)(d) of the Listing Rules.

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LETTER FROM THE BOARD

PROCEDURE FOR VOTING BY POLL

In accordance with bye-law 66 of the bye-laws of the Company, a resolution put to the vote of a general meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:

• (a) by the chairman of such meeting; or

• (b) by at least three members present in person (or in the case of a member being a corporation by its duly authorised representative) or by proxy for the time being entitled to vote at the meeting; or

• (c) by a member or members present in person (or in the case of a member being a corporation by its duly authorised representative) or by proxy and representing not less than one-tenth of the total voting rights of all members having the right to vote at the meeting; or

• (d) by a member or members present in person (or in the case of a member being a corporation by its duly authorised representative) or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right.

A demand by a person as proxy for a member or in the case of a member being a corporation by its duly authorised representative shall be deemed to be the same as a demand by a member.

RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, statements of fact expressed herein are true, accurate and not misleading, statements of opinion expressed herein have been arrived at after due and careful consideration and there are no other facts not contained in this circular the omission of which would make any statement herein misleading.

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LETTER FROM THE BOARD

RECOMMENDATION

The Directors believe that the proposals for grant of share options in excess of the eligible participants’ maximum 1% entitlement in the 12-month period up to and including the date of the further grant are in the best interests of the Company and Shareholders and accordingly recommend Shareholders to vote in favour of the resolutions to be proposed at the SGM.

Yours faithfully, By order of the Board Shui On Construction and Materials Limited Lo Hong Sui, Vincent Chairman

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NOTICE OF SPECIAL GENERAL MEETING

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(Incorporated in Bermuda with limited liability)

(Stock Code: 983)

NOTICE IS HEREBY GIVEN that a special general meeting of the shareholders of Shui On Construction and Materials Limited (the “Company”) will be held at Room 103, 1st Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong on Thursday, 12 July 2007 at 3:00 p.m. for the purpose of considering and, if thought fit, passing with or without amendments, the following resolutions as ordinary resolutions of the Company:-

ORDINARY RESOLUTIONS

• (1) “ THAT the grant of an option to Mr. Choi Yuk Keung, Lawrence to subscribe for 250,000 shares of the Company under the existing share option scheme adopted by the Company on 27 August 2002 on the terms set out in the circular issued by the Company on 26 June 2007 be and is hereby approved, confirmed and ratified and that the directors of the Company be authorized to take all such steps as may be necessary or desirable to give effect to the grant.”

• (2) “ THAT the grant of an option to Mr. Wong Yuet Leung, Frankie to subscribe for 500,000 shares of the Company under the existing share option scheme adopted by the Company on 27 August 2002 on the terms set out in the circular issued by the Company on 26 June 2007 be and is hereby approved, confirmed and ratified and that the directors of the Company be authorized to take all such steps as may be necessary or desirable to give effect to the grant.”

• (3) “ THAT the grant of an option to Mr. Wong Kun To, Philip to subscribe for 200,000 shares of the Company under the existing share option scheme adopted by the Company on 27 August 2002 on the terms set out in the circular issued by the Company on 26 June 2007 be and is hereby approved, confirmed and ratified and that the directors of the Company be authorized to take all such steps as may be necessary or desirable to give effect to the grant.”

By Order of the Board Sincere Wong

Company Secretary

Hong Kong, 26 June 2007

• for identification purpose only

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NOTICE OF SPECIAL GENERAL MEETING

Notes:

• (1) Any member entitled to attend and vote at the above meeting is entitled to appoint one or more proxies to attend and, on a poll, vote in his stead. A proxy need not be a member of the Company.

• (2) 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 certified copy thereof, must be lodged with the head office of the Company at 34th Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong not less than 48 hours before the time fixed for holding the meeting.

At the date of this notice, the executive directors of the Company are Mr. Lo Hong Sui, Vincent (Chairman), Mr. Choi Yuk Keung, Lawrence (Vice-chairman), Mr. Wong Yuet Leung, Frankie (Chief Executive Officer) and Mrs. Lowe Hoh Wai Wan, Vivien; the non-executive director of the Company is Professor Michael John Enright; and the independent non-executive directors of the Company are Mr. Anthony Griffiths, Mr. Cheng Mo Chi, Moses and Professor K.C. Chan.

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