Matrix Holdings Limited — Proxy Solicitation & Information Statement 2002

Dec 17, 2002

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 Matrix Holdings Limited (the “Company”), you should at once hand this circular with the accompanying form of proxy to the purchaser or other 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, make 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.

MATRIX HOLDINGS LIMITED 美力時集團有限公司

(incorporated in Bermuda with limited liability)

PROPOSALS INVOLVING ADOPTION OF CHINESE NAME ADOPTION OF THE NEW SHARE OPTION SCHEME AND TERMINATION OF THE EXISTING SHARE OPTION SCHEME

A notice convening a special general meeting of the shareholders of the Company held at Rooms 1201 & 1222, 12/F., Peninsula Centre, 67 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on 17 December 2002 at 10:00 a.m. (the “Special General Meeting”) is set out on pages 16 and 18 of this circular. Whether or not you propose to attend the Special General Meeting, you are requested to complete and return the accompanying form of proxy to the Company’s branch share registrar in Hong Kong, Secretaries Limited, at 5th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong as soon as possible and in any event not less that 48 hours before the time appointed for the holding of the Special General Meeting or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting at the Special General Meeting or any adjourned meeting should you so wish.

22 November 2002

INDEX

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Board
I.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
II.	Adoption of Chinese Name
	1. Reason for the adoption of Chinese Name . . . . . . . . . . . . . . . . . . . . . .	4
	2. Conditions of the Chinese Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
III.	Existing Share Option Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
IV.	New Share Option Scheme
	1. Reasons for the New Share Option Scheme . . . . . . . . . . . . . . . . . . . . .	5
	2. Conditions of the New Share Option Scheme . . . . . . . . . . . . . . . . . . .	5
	3. Value of the Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
	4. Listing and Dealing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
V.	Document Available for Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
VI.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
VII.	Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
VIII.	General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Appendix I – Principal Terms of Rules of the New Share Option Scheme . . . . . . . .		8
Appendix II – Notice of Special General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		16

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DEFINITIONS

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

• “Adoption Date”

The date on which the New Share Option Scheme is deemed to take effect according to its terms

• “Board” The board of directors of the Company

• “Business Day(s)”

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

• “Company”

• Matrix Holdings Limited, a company incorporated in Bermuda with limited liability, the shares of which are listed on the main board of the Stock Exchange

• “Directors” The directors of the Company

• “Eligible Participant”

• Any full-time employees, executives or officers, directors of the Company or any of the Subsidiaries and any suppliers, consultants, agents or advisers who have contributed to the Group

• “Employee” Any full-time employee or officer of any member of the Group

• “Existing Share Option Scheme”

• The existing share option scheme for the full-time employees of the Group adopted by the Company on 26 January 1994 and will expire on 25 January 2004

• “Grantee”

• Any Eligible Participant who accepts the offer of the grant of an Option in accordance with the rules of the New Share Option Scheme or (where the context so permits) a person or persons who, in accordance with the laws of succession applicable in respect of the death of such Eligible Participant is, or are entitled to exercise the Option accepted by such Eligible Participant (to the extent not already exercised) in consequence of the death of such Eligible Participant

• “Group”

The Company and its Subsidiaries

• “Hong Kong”

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

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DEFINITIONS

• “Listing Rules”

• “New Share Option Scheme”

• “Notice of Special General Meeting”

• “Share(s)”

• “Shareholder(s)”

• “Special General Meeting”

• “Stock Exchange”

• “Subsidiary”

The Rules Governing the Listing of Securities on the Stock Exchange, as modified from time to time

The new share option scheme to be adopted by the Company pursuant to Ordinary Resolution as set out in the Notice of Special General Meeting

The notice convening the Special General Meeting as set out in Appendix II to this circular

• Share(s) of HK$0.10 each in the share capital of the Company

Holder(s) of Share(s)

The special general meeting of the Company to be held at Rooms 1201& 1222, 12/F., Peninsula Centre, 67 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on 17 December 2002 at 10:00 a.m. (or any adjournment thereof), to consider and, if thought fit, to approve the adoption of the Chinese name “美力時集團有限公司 ” for the purpose of registration in Hong Kong, the adoption of the New Share Option Scheme and the termination of the Existing Share Option Scheme

The Stock Exchange of Hong Kong Limited

A company which is for the time being and from time to time a subsidiary (within the meaning of section 2 of the Companies Ordinance, Chapter 32 of the Laws of Hong Kong, as modified from time to time) of the Company

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LETTER FROM THE BOARD

MATRIX HOLDINGS LIMITED 美力時集團有限公司

(incorporated in Bermuda with limited liability)

Executive Directors: Cheng Yung Pun (Chairman) Cheng Wing See, Nathalie Yu Sui Chuen Lee Sai Keung, Daniel

Registered Office: Cedar House 41 Cedar Avenue Hamilton HM12 Bermuda

Independent non-executive Directors: Heng Kwoo Seng Mak Shiu Chung, Godfrey

Principal Office in Hong Kong: Rooms 1201 & 1222 12/F., Peninsula Centre 67 Mody Road Tsimshatsui East Kowloon Hong Kong

22 November 2002

To the Shareholders

Dear Sir or Madam,

PROPOSALS INVOLVING

ADOPTION OF CHINESE NAME

ADOPTION OF THE NEW SHARE OPTION SCHEME

AND TERMINATION OF THE EXISTING SHARE OPTION SCHEME

I. INTRODUCTION

With effect from 3 July 2001, a Bermuda company is allowed to register a Chinese name in Hong Kong. The Directors propose to seek Shareholders’ approval on the adoption of “美力時集團有限公司”, being the translation of the Company’s English name, for the purpose of registration in Hong Kong.

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LETTER FROM THE BOARD

On 26 January 1994, the Company adopted the Existing Share Option Scheme relating to the grant of options to directors and employees of the Group to subscribe for shares of the Company. As the Stock Exchange has amended Chapter 17 of the Listing Rules relating to share option scheme, it is proposed to adopt the New Share Option Scheme to comply with the newly amended Listing Rules in replacement and substitution of the Existing Share Option Scheme.

The purpose of this circular is to provide you with further details in respect of the proposals involving the adoption of the Chinese name, the adoption of the New Share Option Scheme and the termination of the Existing Share Option Scheme.

II. ADOPTION OF CHINESE NAME

1. Reason for the adoption of Chinese Name

As the Company is a company incorporated in Bermuda, only its English name appears in its Certificate of Incorporation. Accordingly, the Company has been registered as an oversea company in its English name only under Part XI of the Hong Kong Companies Ordinance. The Chinese name “美力時集團有限公司” that now appears in the Company’s documents has been used as a Chinese translation of its English name for identification purpose. As an oversea company is now allowed to register a Chinese name with the Registrar of Companies in Hong Kong notwithstanding the fact that only the English name of a company appears in the Certificate of Incorporation, the Directors propose the adoption of the Chinese name “美力時集團有限公司” to formalize its use by the Company in Hong Kong for identification purpose only.

As all existing share certificates bearing the corporate name of the Company both in English and Chinese shall continue to be evidence of title to the Shares and be valid for trading, settlement and registration purposes, there would not be any arrangement for free exchange of the existing share certificates upon obtaining the approval of registration of the Company’s Chinese name in Hong Kong.

2. Conditions of the Chinese Name

The adoption of the Chinese Name will be subject to the following conditions:

• (i) the passing of a special resolution in relation to the adoption of the Chinese name by the Shareholders of the Company at the Special General Meeting; and

• (ii) the approval of the Registrar of Companies in Hong Kong.

The Company will file a special resolution authorising the adoption of the Chinese name together with the relevant statutory form with the Registrar of Companies in Hong Kong. A further announcement will be made by the Company when the adoption of Chinese name becomes effective.

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LETTER FROM THE BOARD

III. EXISTING SHARE OPTION SCHEME

Under the Existing Share Option Scheme, there has not been any option granted and there are no options that are outstanding and exercisable. The Company has no intention to grant any options under the Existing Share Option Scheme before the Special General Meeting. It was proposed that subject to the approval of the Shareholders of the Company and upon adoption of the New Share Option Scheme at the Special General Meeting, the operation of the Existing Share Option Scheme will be terminated and in such event no further options will be offered under the Existing Share Option Scheme but all options which (if any) have been previously granted thereunder will continue to be valid and exercisable in accordance with the provisions of the Existing Share Option Scheme which will remain in force in all other respects.

IV. NEW SHARE OPTION SCHEME

Principal terms of the New Share Option Scheme

A summary of the rules of the New Share Option Scheme is set out in the Appendix I to this circular.

1. Reasons for the New Share Option Scheme

Under the New Share Option Scheme, the Directors may grant options to any full-time employees, executives or officers, directors of the Group and any suppliers, consultants, agents or advisers who have contributed to the business and operation of the Group. The New Share Option Scheme will enable the Group to offer valuable incentive to attract and retain quality personnel and other persons to work to increase the value of the Shares of the Company. To this end, the Directors may specify the minimum period, if any, for which an option must be held or the performance targets, if any, that must be achieved before the option can be exercised.

1. Conditions of the New Share Option Scheme

The New Share Option Scheme is conditional on:

• (i) the approval of the Shareholders of the Company at the Special General Meeting;

• (ii) the Listing Committee of the Stock Exchange granting the listing of and permission to deal in the new Shares of the Company which may be issued and allotted pursuant to the New Share Option Scheme; and

• (iii) the Bermuda Monetary Authority giving permission in respect of the granting of options and the issue of Shares upon exercise of options under the New Share Option Scheme, if so required.

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LETTER FROM THE BOARD

3. Value of the options

The Directors consider it inappropriate to value all the options that can be granted under the New Share Option Scheme on the assumption that they were granted on 18 November 2002 (the “Latest Practicable Date”), being the latest practicable date prior to the printing of this circular, as a number of variables crucial for the valuation cannot be determined. The variables which are critical for the determination of the value of such options include the subscription price for the Shares upon the exercise of the subscription rights attaching to the options, whether or not the options will be granted under the New Share Option Scheme and the timing of the granting of such options, the period during which the subscription rights may be exercised, the discretion of the Directors to impose any performance target that has to be achieved before the subscription rights attaching to the options can be exercised and any other conditions that the Directors imposed on the options and whether or not such options if granted will be exercised by the option holders. The subscription price payable for the Shares depends on the price of the Shares as quoted on the Stock Exchange, which in turn depends on when the Directors are to grant options under the New Share Option Scheme. It is also difficult to ascertain with accuracy the subscription price of the Shares given the volatility the Share price may be subject to during the ten year life span of the New Share Option Scheme. In the premises, the Directors are of the view that the value of the option depends on a number of variables which are either difficult to ascertain or can only be ascertained subject to a number of theoretical basis and speculative assumptions. Accordingly, the Directors believe that any valuation of the options based on a large number of speculative assumptions would not be meaningful but would be misleading to the Shareholders.

4. Listing and Dealing

Application has been made to the Listing Committee of the Stock Exchange for the approval of the listing of and permission to deal in the new Shares of the Company, representing a maximum of 10 per cent of the issued share capital of the Company as at the Adoption Date, which may be issued and allotted pursuant to the New Share Option Scheme.

Based on the number of Shares in issue as at the Latest Practicable Date, assuming no further Shares will be issued or repurchased prior to the Special General Meeting, the Company may grant options to subscribe for 32,272,000 Shares under the New Share Option Scheme.

The Shares of the Company are only listed on the Stock Exchange and not on any other stock exchange.

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LETTER FROM THE BOARD

V. DOCUMENT AVAILABLE FOR INSPECTION

A copy of the New Share Option Scheme will be available for inspection at the office of Rooms 1201 & 1222, 12/F., Peninsula Centre, 67 Mody Road, Tsimshatsui East, Kowloon, Hong Kong during normal business hours up to and including 17 December 2002 and at the Special General Meeting.

VI. RECOMMENDATION

The Directors believe that the proposals involving the adoption of the Chinese name, the adoption of the New Share Option Scheme and the termination of the Existing Share Option Scheme are in the best interests of the Company and the Shareholders as a whole. In particular, the performance targets (if any) and the subscription price set in accordance with the New Share Option Scheme will act as incentive to the Eligible Participants to contribute more efforts for the benefits of the Group. Accordingly, the Directors recommend you to vote in favour of the resolutions as set out in the notice of the Special General Meeting.

VII. RESPONSIBILITY STATEMENT

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

VIII. GENERAL

A further announcement will be made on the outcome of the Special General Meeting regarding the adoption of the Chinese name, the adoption of the New Share Option Scheme and the termination of the Existing Share Option Scheme on the business day following such meeting.

Your attention is also drawn to the additional information set out in the Appendices to this circular.

Yours faithfully

By order of the board of

Matrix Holdings Limited

Cheng Yung Pun

Chairman

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PRINCIPAL TERMS OF RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX I

This Appendix sets out further information of the New Share Option Scheme and also summarises the rules of the New Share Option Scheme but does not form part of nor is it intended to be, part of the New Share Option Scheme.

1 PURPOSE

The purpose of the New Share Option Scheme is to enable the Company to grant options to employees, executives or officers of the Company or any of its Subsidiaries (including executive and non-executive Directors of the Company or any of its Subsidiaries) and any suppliers, consultants, agents or advisers who have contributed to the Company or any of its Subsidiaries as incentives and rewards for their contribution to the Company or such Subsidiaries.

2 WHO MAY JOIN

The Board may, at its discretion, offer eligible participants, being any full-time employees, executives or officers, directors of the Company or any of its Subsidiaries (including executive; non-executive directors and independent non-executive directors of the Company or any of its Subsidiaries) and any suppliers, consultants, agents or advisers who contribute or have contributed to the Company or any of its Subsidiaries (“Eligible Participants”), options to subscribe for such number of new Shares as the Board may determine at an exercise price determined in accordance with paragraph 5 below. Upon acceptance of the option, the grantee shall pay HK$1.00 to the Company by way of consideration for the grant.

3 MAXIMUM NUMBER OF SHARES

The maximum number of Shares which may be issued upon exercise of all options to be granted under the New Share Option Scheme and any other share option scheme(s) of the Company must not exceed 10 per cent of the Shares in issue as at the date approving the adoption of the New Share Option Scheme in the Special General Meeting. Options lapsed in accordance with the terms of such share option scheme(s) will not be counted for the purpose of the 10 per cent limit.

Subject to the issue of a circular by the Company and the approval of the Shareholders in general meeting and/or such other requirements prescribed under the Listing Rules from time to time, the Board may:

• Refresh this limit at any time to 10 per cent of the Shares in issue as the date of the approval by the Shareholders in general meeting (options previously granted under any share option schemes of the Company (including those outstanding, cancelled, lapsed in accordance with such schemes or exercised options) will not be counted for the purpose of calculating the limit as refreshed); and/or

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PRINCIPAL TERMS OF RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX I

• Grant options beyond the 10 per cent limit to Eligible Participants specifically identified by the Board whereupon the Company shall send a circular to the Shareholders containing, amongst others, a generic description of the specified participants who may be granted such options, the number and terms of the options to be granted and the purpose of granting options to the specified participants with an explanation as to how the options serve such purpose.

Notwithstanding the foregoing, the Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the New Share Option Scheme and any other share option scheme(s) of the Company at any time shall not exceed 30 per cent of the Shares in issue from time to time. No options may be granted under any scheme(s) of the Company or any of its Subsidiaries if this will result in the 30 per cent limit being exceeded.

4 MAXIMUM NUMBER OF OPTIONS TO ANY ONE INDIVIDUAL

The total number of Shares issued and which may fall to be issued upon exercise of the options granted under the New Share Option Scheme and any other share option scheme(s) of the Company (including both exercised and outstanding options) to each Eligible Participant in any 12-month period up to the date of grant shall not exceed 1 per cent of the Shares in issue as at the date of grant.

Any further grant of options in excess of this 1 per cent limit shall be subject to the issue of a circular by the Company and the approval of the Shareholders in general meeting with such Eligible Participant and his associates abstaining from voting and/or other requirements prescribed under the Listing Rules from time to time.

5 PRICE OF SHARES

The subscription price for a Share in respect of any particular option granted under the New Share Option Scheme (which shall be payable upon exercise of the option) shall be such price as the Board in its absolute discretion shall determine, save that such price will not be less than the highest of (a) the closing price of the Shares as stated in the Stock Exchange’s daily quotations sheet on the date of grant, which must be a business day (and for this purpose shall be taken to be the date of the Board meeting at which the Board proposes to grant the options); (b) the average of the closing prices of the Shares as stated in the Stock Exchange’s daily quotation sheets for the five business days immediately preceding the date of grant; and (c) the nominal value of a Share.

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PRINCIPAL TERMS OF RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX I

6 GRANTING OPTIONS TO CONNECTED PERSONS

Any grant of options to a Director, chief executive or substantial Shareholder of the Company or any of its associates is required to be approved by the independent non-executive Directors (excluding the independent non-executive Director who is the grantee of the options).

If the Company proposes to grant to a substantial Shareholder (as defined in the Listing Rules) of the Company or any independent non-executive Director or their respective associates which will result in the number of Shares issued and to be issued upon exercise of options already granted and to be granted (including options exercised, cancelled and outstanding) to such person in the 12-month period up to and including the date of the offer of such grant:

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

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

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

7 RESTRICTIONS ON THE TIME OF GRANT OF OPTIONS

A grant of options may not be made after a price-sensitive event has occurred or a price-sensitive matter has been the subject of a decision until such price-sensitive information has been published in the newspaper. In particular, no options may be granted during the period commencing one month immediately preceding the earlier of (a) the date of the Board meeting for the approval of the Company’s annual or interim results; and (b) the deadline for the Company to publish its annual or interim results announcement under the listing agreement and ending on the date of actual publication of the results announcement.

8 RIGHTS ARE PERSONAL TO GRANTEE

An option is personal to the grantee and the grantee may not 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 attempt to do so.

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PRINCIPAL TERMS OF RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX I

9 TIME OF EXERCISE OF OPTION

There is no general requirement that an option must be held for any minimum period before it can be exercised but the Board is empowered to impose at its discretion any such minimum period at the time of grant of any particular option. The date of grant of any particular option is the date when the duplicate offer document constituting acceptance of the option duly signed by the grantee, together with a remittance in favour of the Company of HK$1.00 by way of consideration is received by the Company, such date must be on or before the 28-day after the option is offered to the relevant grantee. The period during which an option may be exercised will be determined by the Board at its absolute discretion, save that no option may be exercised more than 10 years after it has been granted. If there is a minimum period for which an option must be held before it can be exercised, the options can help the Group to attract and retain the grantees whose contributions are important to the long-term growth and profitability of the Group. No option may be granted more than 10 years after the date of approval of the New Share Option Scheme. Subject to earlier termination by the Company in general meeting or by the Board, the New Share Option Scheme shall be valid and effective for a period of 10 years after the date of adoption of the New Share Option Scheme by the Shareholders by resolution at a general meeting.

10 PERFORMANCE TARGET

The Board has the discretion to require a particular grantee to achieve certain performance targets specified at the time of grant before any option granted under the New Share Option Scheme can be exercised. This will provide incentives to the grantees to improve the performance of Company. There are no specific performance targets stipulated under the terms of the New Share Option Scheme and the Board is currently unable to determine such restriction on the exercise of the options granted under the New Share Option Scheme.

11 RIGHTS ON CEASING TO BE AN ELIGIBLE PARTICIPANT AND DEATH

• (a) In the event of the grantee ceasing to be an Eligible Participant for any reason other than on his or her death or the termination of his or her relationship with the Company or any of its Subsidiaries on one or more of the grounds specified in paragraph 12 below, the grantee may exercise the option up to his or her entitlement at the date of cessation of being an Eligible Participant (to the extent not already exercised) within the period of one month following the date of such cessation. In relation to a grantee who is an Eligible Participant by reason of his or her employment with the Company or any of its Subsidiaries, the date of cessation of being an Eligible Participant shall be the last actual working day with the Company or the relevant Subsidiary whether salary is paid in lieu of notice or not.

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PRINCIPAL TERMS OF RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX I

• (b) In the case of the grantee ceasing to be an Eligible Participant by reason of death and none of the events which would be a ground for termination of his or her relationship with the Company and/or any of its Subsidiaries under paragraph 12 below arises, the legal representative(s) of the grantee shall be entitled within a period of 12 months or such longer period as the Board may determine from the date of death to exercise the option in full (to the extent not already exercised).

12 LAPSE OF OPTION ON MISCONDUCT, BANKRUPTCY OR DISMISSAL ETC.

If a grantee ceases to be an Eligible Participant by reason of the termination of his relationship with the Company and/or any of its Subsidiaries on any one or more of the grounds that he has been guilty of serious misconduct, or has committed any act of bankruptcy or is unable to pay his or her debts or has become insolvent or has made any arrangement or has compromised with his or her creditors generally, or has been convicted of any criminal offence involving his or her integrity or honesty or in relation to an employee of the Company and/or any of its Subsidiaries (if so determined by the Board) on any other ground on which an employer would be entitled to terminate his employment at common law or pursuant to any applicable laws or under the grantee’s service contract with the Company or the relevant subsidiary, his or her option will lapse and not be exercisable on the date of termination of his or her relationship with the Company and/or any of its Subsidiaries.

13 RIGHTS ON TAKEOVER

If a general offer is made to all the holders of 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, the grantee (or his or her legal personal representatives) shall be entitled to exercise the option in full (to the extent not already exercised) at any time within 14 days after the date on which the offer becomes or is declared unconditional.

14 RIGHTS ON SCHEME OF ARRANGEMENT FOR THE COMPANY

Subject to the periods specified in paragraph 11 above, if a general offer by way of a scheme of arrangement is made to all the holders of Shares and the scheme has been approved by the necessary number of holders of Shares at the requisite meetings, the grantee (or his or her legal personal representatives) may, thereafter (but before such time as shall be notified by the Company and in any case, before the scheme becomes effective) exercise the option to its full extent or to the extent specified in such notice.

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PRINCIPAL TERMS OF RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX I

15 RIGHTS ON WINDING-UP

In the event a notice is given by the Company to its Shareholders to convene a Shareholders’ meeting for the purpose of considering and, if thought fit, approving a resolution to voluntarily wind-up the Company, the Company shall forthwith give notice thereof to all the grantees. The grantee (or his or her legal personal representatives) may by notice in writing to the Company accompanied by a remittance of the full amount of the aggregate subscription price for the Shares in respect of which the notice is given (such notice to be received by the Company not later than two Business Days prior to the proposed Shareholders’ meeting) exercise the option (to the extent not already exercised) either to its full extent or to the extent specified in such notice and the Company shall as soon as possible and in any event no later than the Business Day immediately prior to the date of the proposed Shareholders’ meeting, allot and issue such number of Shares to the grantee which falls to be issued on such exercise of the option. The Company shall give notice to the grantee of the passing of such resolution within seven days after the passing thereof.

16 LAPSE OF THE OPTIONS

An option will lapse automatically and not be exercisable (to the extent not already exercised) on the earliest of:

• (a) the expiry date relevant to that option;

• (b) the expiry of any of the periods referred to in paragraphs 11, 13 and 14 above;

• (c) the date of commencement of the winding-up of the Company (as determined in accordance with the applicable law) as referred to in paragraph 15 above;

• (d) the date on which the scheme for the reconstruction of the Company or its amalgamation with any other company or companies, becomes effective as referred to in paragraph 14 above;

• (e) the date on which the grantee ceases to be an Eligible Participant by reason of the termination of his relationship with the Company on any one or more of the grounds specified in paragraph 12 above. A resolution of the Board or the board of directors of the relevant Subsidiary to the effect that the grantee’s relationship with the Company has or has not been terminated on one or more of the grounds specified in paragraph 12 above shall be conclusive;

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PRINCIPAL TERMS OF RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX I

• (f) the date on which the grantee ceases to be an Eligible Participant on or after committing any act of bankruptcy or becoming insolvent or making any arrangements or composition with his creditors generally; or

• (g) the date on which the grantee commits a breach of the prohibitions specified in paragraph 8 above or the options are cancelled in accordance with paragraph 20 below.

17 RANKING OF SHARES

The Shares to be allotted upon the exercise of an option will not carry voting rights until completion of the registration of the grantee (or such other person nominated by the grantee) as the holder thereof. Subject to the aforesaid, Shares allotted and issued on the exercise of options will rank pari passu with and shall have the same voting, dividend, transfer and other rights, including those arising on liquidation of the Company as attached to the other fully-paid Shares in issue on the date of issue.

18 EFFECT OF ALTERATIONS TO CAPITAL

In the event of a capitalisation issue, rights issue, sub-division or consolidation of Shares or reduction of capital whilst any option may become or remains exercisable, such corresponding alterations (if any) shall be made in the number of Shares subject to any outstanding options and/or the exercise price of each outstanding option as the auditors of the Company or the independent financial adviser shall certify in writing to the Board to be in their opinion fair and reasonable and in compliance with the Listing Rules. Any such alterations will be made on the basis that a grantee shall have the same proportion of the issued share capital of the Company for which any grantee of an option is entitled to subscribe pursuant to the options held by him before such alteration and the aggregate subscription price payable on the full exercise of any option is to remain as nearly as possible the same (and in any event not greater than) as it was before such event. No such alteration will be made the effect of which would be to enable a Share to be issued at less than its nominal value. The issue of securities as consideration in a transaction is not to be regarded as a circumstance requiring any such alterations.

19 ALTERATION OF SHARE OPTION SCHEME

The New Share Option Scheme may be altered in any respect by resolution of the Board except that:

• (a) any alteration to the advantage of the grantees or the Eligible Participants (as the case may be) in respect of the matters contained in Rule 17.03 of the Listing Rules; and

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PRINCIPAL TERMS OF RULES OF THE NEW SHARE OPTION SCHEME

APPENDIX I

• (b) any material alteration to the terms and conditions of the New Share Option Scheme or any change to the terms of options granted (except any alterations which take effect automatically under the terms of the New Share Option Scheme), shall first be approved by the Shareholders in general meeting provided that if the proposed alteration shall adversely affect an option granted or agreed to be granted prior to the date of alteration, such alteration shall be further subject to the grantees’ approval in accordance with the terms of the New Share Option Scheme. The amended terms of the New Share Option Scheme shall still comply with the Chapter 17 of the Listing Rules and any change to the authority of the Board in relation to any alteration to the terms of the New Share Option Scheme must be approved by Shareholders in general meeting.

20 CANCELLATION OF OPTIONS

Any cancellation of options granted but not exercised must be approved by the grantee of the relevant options. Where the Company cancels options and issued new ones to the same grantee, the issue of such new options may only be made under the New Share Option Scheme with available unissued options (excluding the cancelled options) within the 10 per cent limit approved by Shareholders as mentioned in paragraph 3 above.

21 TERMINATION OF THE SHARE OPTION SCHEME

The Company may by resolution in general meeting at any time terminate the New Share Option Scheme and in such event no further option shall be offered but the provisions of the New Share Option Scheme shall remain in force to the extent necessary to give effect to the exercise of any option granted prior to the termination or otherwise as may be required in accordance with the provisions of the New Share Option Scheme. Options granted prior to such termination at the time of termination shall continue to be valid and exercisable in accordance with the New Share Option Scheme.

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NOTICE OF SPECIAL GENERAL MEETING

APPENDIX II

MATRIX HOLDINGS LIMITED 美力時集團有限公司

(incorporated in Bermuda with limited liability)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a Special General Meeting of the Company will be held at Rooms 1201 & 1222, 12/F., Peninsula Centre, 67 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on 17 December 2002 at 10:00 a.m. for the purpose of considering and, if thought fit, passing with or without amendments, the following resolutions as special and ordinary resolutions:

SPECIAL RESOLUTION

“THAT “美力時集團有限公司 ”be adopted as the Company’s Chinese name for the purpose of registration in Hong Kong.”

ORDINARY RESOLUTION

“ THAT

• (a) subject to and conditional upon (i) the Bermuda Monetary Authority granting its permission for the grant of options and the issue of shares upon exercise of options under the share option scheme of the Company (the “New Share Option Scheme”) if so required, a copy of which marked “A” is produced to the meeting and for the purposes of identification signed by the Chairman thereof; and (ii) the Listing Committee of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) granting the listing of and permission to deal in the shares to be issued pursuant to the exercise of any options granted under the New Share Option Scheme, the New Share Option Scheme be and is hereby approved and adopted and the Board of Directors of the Company be and is hereby authorised to do all such acts and to enter into all such transactions, arrangements and agreements as may be necessary or expedient in order to give full effect to the New Share Option Scheme including but without limitation:

• (i) to administer the New Share Option Scheme under which options will be granted to participants eligible under the New Share Option Scheme to subscribe for shares of the Company;

• (ii) to modify and/or amend the New Share Option Scheme from time to time provided that such modification and/or amendment is effected in accordance with the provisions of the New Share Option Scheme relating to modification and/or amendment;

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NOTICE OF SPECIAL GENERAL MEETING

APPENDIX II

• (iii) to issue and allot from time to time such number of shares in the capital of the Company as may be required to be issued pursuant to the exercise of the options under the New Share Option Scheme provided always that the total number of shares subject to the New Share Option Scheme, when aggregated with any shares subject to any other share option schemes, shall not exceed 10 per cent of the relevant class of the issued share capital of the Company as at the date of passing this resolution, but the Company may seek approval of its shareholders in general meeting for refreshing the 10 per cent limit under the New Share Option Scheme and the maximum number of shares which may be issued upon exercise of all outstanding options granted under the New Share Option Scheme and any other share option schemes of the Company in issue shall not exceed 30 per cent of the relevant class of the issued share capital of the Company from time to time;

• (iv) to make applications at the appropriate time or times to the Stock Exchange and any other stock exchanges upon which the issued shares of the Company may for the time being be listed, for listing of and permission to deal in any shares which may hereafter from time to time be issued and allotted pursuant to the exercise of the options under the New Share Option Scheme; and

• (v) to consent, if it so deems fit and expedient, to such conditions, modifications and/or variations as may be required or imposed by the relevant authorities in relation to the New Share Option Scheme.

• (b) the operation of the share option scheme of the Company adopted on 26 January 1994 (the “Existing Share Option Scheme”) be and is hereby terminated and that no further options shall be offered or granted pursuant to the terms of the Existing Share Option Scheme.”

By Order of the Board Cheng Yung Pun Chairman

Hong Kong, 22 November 2002

Principal place of business in Hong Kong

Rooms 1201 & 1222, 12/F., Peninsula Centre 67 Mody Road Tsimshatsui East Kowloon

Hong Kong

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NOTICE OF SPECIAL GENERAL MEETING

APPENDIX II

Notes:

• (a) A form of proxy to be used for the meeting is enclosed.

• (b) A member entitled to attend and vote at the Special General Meeting is entitled to appoint another person (who must be an individual) as his proxy to attend and vote in his stead. A proxy need not be a member of the Company.

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

• (d) The instrument appointing a proxy, together with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy thereof, must be deposited with the Hong Kong branch share registrars of the Company, Secretaries Limited, 5th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong not less than 48 hours before the time appointed for holding the Special General Meeting or adjourned meeting (as the case may be) and in default the proxy shall not be treated as valid. Completion and return of the form of proxy shall not preclude members from attending and voting in person at the Special General Meeting or at any adjourned meeting should they so wish.

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