Richly Field China Development Limited — Proxy Solicitation & Information Statement 2004

Aug 9, 2004

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 United Pacific Industries Limited (the “Company”), you should at once hand this Circular to the purchaser or the transferee or to the bank, stock broker or other agent through whom the sale or transfer was effected, for transmission to the purchaser or the 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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United Pacific Industries

UNITED PACIFIC INDUSTRIES LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 00176)

PROPOSED ADOPTION OF NEW STOCK OPTION SCHEME

A notice convening a special general meeting of United Pacific Industries Limited to be held at Flat B, 19/F, Chai Wan Industrial Centre, 20 Lee Chung Street, Chai Wan, Hong Kong on Monday, 30 August 2004 at 10:30 a.m. (or so soon after the conclusion or adjournment of the annual general meeting of the Company to be held at 10:00 a.m. on the same day and at the same place) is set out on page 14 of this Circular. A form of proxy is also enclosed.

Whether or not you are able to attend the special general meeting, you are requested to complete the enclosed proxy form in accordance with the instructions printed thereon and return it to the Company at its registered office not later than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Completion and return of the proxy form will not prejudice you from subsequently attending and voting in person at the meeting or any adjournment thereof should you so wish.

9 August 2004

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE CHAIRMAN
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
THE PROPOSED SCHEME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
APPLICATION FOR LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
RESPONSIBILITY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
RECOMMENDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
APPENDIX I — PRINCIPAL TERMS OF THE PROPOSED UPI STOCK
OPTION SCHEME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
APPENDIX II — NOTICE OF SPECIAL GENERAL MEETING . . . . . . . . . . . . . . . . .	14
APPENDIX III — PROCEDURE FOR DEMANDING A POLL . . . . . . . . . . . . . . . . . . . .	16

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DEFINITIONS

In this Circular, unless the context otherwise requires, the following words and expressions shall have the following meanings:

“Act”	Bermuda Companies Act of 1981
“Adoption Date”	the date on which the Scheme is adopted by the Company in
	general meeting
“Aggregate Subscription Cost”	the total amount payable for Shares which may be acquired on
	the exercise of Options
“associates”	has the meaning attributed in Listing Rule 1.01
“Auditors”	the auditors of the Company for the time being
“Board”	the Board of Directors of the Company for the time being
“business day”	means a day on which banks are open in Hong Kong for
	general banking business, other than Saturdays and days on
	which a tropical cyclone warning No. 8 or above or a “black
	rainstorm warning signal” is hoisted in Hong Kong at any
	time between 9:00 a.m. and 5:00 p.m.
“Committee”	means the Compensation Committee of the Company
“Company”	United Pacific Industries Limited, a company incorporated in
	Bermuda and listed on the Stock Exchange of Hong Kong
	(Stock Code No. 176)
“Date of Grant”	in relation to an Option, the date on which the Option is
	granted pursuant to Rule 11.5
“Exchange” or the “SEHK”	the Stock Exchange of Hong Kong Limited (including any
	successor entity or body)
“Executive”	any senior employee of the Company or its subsidiaries
	selected by the Committee to participate in the Scheme in
	accordance with Rule 5
“Executive Director”	a director of the Company or its subsidiaries, as the case may
	be, who performs an executive function
“Exercise Date”	the date the Option is deemed exercised, as more particularly
	described in Rule 14.2
“Exercise Price”	the price at which a Grantee shall subscribe for each Share
	upon the exercise of an Option as determined in accordance
	with Rule 12, as adjusted in accordance with Rule 19

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DEFINITIONS

“Exercise Period”	the period for the exercise of an Option, not exceeding ten
	(10) years from the Date of Grant, as more particularly
	described in Rule 13.2
“Grantee”	the person to whom an Option is granted
“Group”	the Company and its subsidiaries
“Group Company”	means any of the Company or its subsidiaries
“Latest Practicable Date”	5 August 2004, being the latest practicable date prior to the
	printing of this Circular
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange of Hong Kong Limited
“Market Day”	a day on which the Exchange is open for trading of securities
“Option”	the right to subscribe for Shares granted or to be granted
	pursuant to the Scheme and for the time being subsisting
“Participant”	persons eligible to participate in the Scheme pursuant to Rule
	5, and where the context requires, includes a Grantee
“Registrar”	Secretaries Limited, or such other Registrar of the Company
	for the time being
“Rules”	means the rules of this Scheme
“Scheme”	this UPI Stock Option Scheme
“SGM”	the special general meeting of the Company to be held on 30
	August 2004, notice of which is set out on page 14 of this
	Circular
“Shares”	ordinary shares of HK$0.10 each in the capital of the
	Company
“Shareholder”	means a person who is registered as a holder of the Shares
“Substantial Shareholder”	means a person who is entitled to exercise, or control the
	exercise of, 10 per cent or more of the voting power at any
	general meeting of the Company, as defined in Listing Rule
	1.01
“Vesting Schedule”	a schedule for the vesting of Shares comprised in the Option
	as described in Rule 9.2
“HK$”	Hong Kong dollar

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LETTER FROM THE CHAIRMAN

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United Pacific Industries

UNITED PACIFIC INDUSTRIES LIMITED

(incorporated in Bermuda with limited liability)

(Stock Code: 00176)

Directors:

Brian C Beazer, Executive Chairman Simon N Hsu, Executive Vice-Chairman Wong Hei Pui Andy, Executive Director and CFO Ho Che Kong, Non-executive Director Ng Ching Wo, Non-executive Director Ramon Sy Pascual, Non-executive Director Peter F Reilly, Non-executive Director Teo Ek Tor, Non-executive Director Dr Wong Ho Ching Chris, Independent Non-executive Director

Registered Office: Clarendon House Church Street Hamilton HM 11 Bermuda

Principal Place of Business in Hong Kong: Flat B, 19th Floor Chai Wan Industrial Centre 20 Lee Chung Street Chai Wan, Hong Kong

9 August 2004

To: The Shareholders of the Company

Dear Sir/Madam,

PROPOSED ADOPTION OF A NEW STOCK OPTION SCHEME

INTRODUCTION

The United Pacific Industries Limited Executive Share Option Scheme (“Expired Scheme”) which was adopted by Shareholders in April 1994, expired in April 2004. As at the Latest Practicable Date, 8,000,000 options granted under the Expired Scheme remain outstanding. They remain exercisable, subject to vesting, in accordance with the provisions of the Expired Scheme, and will expire in July 2013 if unexercised. At this time, there are no other share incentive schemes offered by the Company or any of its subsidiaries.

At the SGM, an ordinary resolution will be proposed for Shareholders to approve and adopt the proposed new stock option scheme (“Scheme”). Participants may be granted Options to subscribe for Shares upon the terms and subject to the conditions of the Scheme. The purpose of this Circular is to provide you with information relating to the Scheme.

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LETTER FROM THE CHAIRMAN

A summary of the principal terms of the Scheme is set out in Appendix I to this Circular. A copy of the rules of the Scheme is available for inspection at the principal place of business of the Company in Hong Kong as stated above, during normal business hours from the date hereof up to and including Friday, 27 August 2004 and at the SGM.

In accordance with the Listing Rules, the Company will publish in the newspapers an announcement on the outcome of the SGM in respect of the resolution relating to the proposed adoption of the Scheme on the business day following the date of the SGM or any adjournment thereof.

THE PROPOSED SCHEME

Participants of the Scheme are limited to senior employees and executive directors who, the Directors consider, are key to the growth and success of the Company and its subsidiaries. Availability of stock options under this Scheme will give the Company leverage to recruit and retain well-qualified individuals in a competitive market. The Scheme also provides an incentive to motivate Participants to achieve and make significant contributions to the Group as their efforts will be recognized and rewarded by the grant of Options to them.

All Options that may be granted under the Scheme are subject to vesting over a 3-year period at the rate of one-third each year on the annual anniversary of the Date of Grant. Assuming the Board, on the recommendation of the Committee, grants Options to an employee annually, this means that with each grant, the employee has a 3-year implicit commitment to the Group before his Options fully vest. In addition, Options will immediately lapse if an employee resigns without good reason. It is expected that these conditions will tend to safeguard the longer term interests of the Group in encouraging these employees to stay, at least until their Options are vested and exercised.

The Scheme will also give Participants an opportunity to have a real and personal direct interest in the Company, and align their interests with those of Shareholders.

For all the foregoing reasons, the Board is of the view that it is in the interests of the Company to adopt the new Scheme.

The Scheme is conditional upon:

• (i) the passing of an ordinary resolution at the SGM to approve and adopt the Scheme; and

• (ii) the Listing Committee of the Exchange granting the listing of, and permission to deal in, any new Shares which may be allotted and issued upon exercise of Options that may be granted under the Scheme in accordance with the terms and conditions of the Scheme.

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LETTER FROM THE CHAIRMAN

Based on the existing issued share capital of the Company as at the Latest Practicable Date, comprising 557,058,400 Shares, and assuming no further Shares will be issued or repurchased by the Company before the SGM, Options to subscribe for up to a maximum of 27,852,920 Shares, representing 5% of the issued Shares (“Scheme Limit”), may be granted to Participants under the Scheme.

The Directors consider that it is not appropriate to state the value of all Options that can be granted under the Scheme as if they had been granted on the Latest Practicable Date prior to the approval of the Scheme given that the variables which are critical for calculating the value of such Options cannot be determined with a reasonable degree of exactitude.

These variables include (i) the subscription price for the Shares upon exercise of the Options which should generally track the share price on the Exchange (over the ten-year life of the Scheme, the share price can be expected to undergo fluctuations); (ii) the number of Shares comprised in Options which may be granted, if any (grants are generally at the absolute discretion of the Board); (iii) the period during which Options may be exercised (Exercise Periods are determined at the absolute discretion of the Board on a case by case basis); and (iv) performance targets or other conditions that must be satisfied before Options can vest (these are imposed, if at all, at the absolute discretion of the Board on a case by case basis).

For the foregoing reasons, the Directors are of the view that the value of the Options depends on a number of variables which are either difficult to ascertain or can only be ascertained subject to a number of theoretical basis and speculative assumptions. Accordingly, the Directors believe that any calculation of the value of the Options will not be meaningful and may be misleading to Shareholders in the circumstances.

APPLICATION FOR LISTING

Application will be made to the SEHK for the listing of, and permission to deal in, the Shares which may be issued upon exercise of Options granted under the Scheme up to the Scheme Limit.

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, there are no other facts the omission of which would make any statement herein misleading.

The Directors who in aggregate hold, or represent shareholders (namely, Strategic Industries, LLC, and Asian Corporate Finance Fund, L.P) holding, a beneficial interest of approximately 53% of the Shares irrevocably confirm that they intend to vote in favour of the Scheme.

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LETTER FROM THE CHAIRMAN

RECOMMENDATION

Having considered the reasons set out herein, the Directors are of the view that adoption of the proposed Scheme is in the best interests of the Company and Shareholders as a whole. Accordingly, the Directors recommend that Shareholders vote in favor of the ordinary resolution as set out in the notice convening the special general meeting.

GENERAL

Your attention is drawn to the appendices to this Circular.

Yours faithfully,

By order of the Board of United Pacific Industries Limited Brian Cyril Beazer Executive Chairman

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APPENDIX I PRINCIPAL TERMS OF THE PROPOSED UPI STOCK OPTION SCHEME

The following is a summary of the principal terms of the proposed Scheme:

(a) Purpose of the Scheme

The purpose of the Scheme is to recognize and reward Participants who have contributed to the success and development of the Group, to provide incentives to Participants to contribute to the Group, and to enable the Group to recruit and retain high-calibre employees and executive directors that are valuable to the Group.

(b) Who may join

The Board, on the recommendation of the Compensation Committee of the Company which administers the Scheme (“Committee”), may grant Options to the following persons provided they are over 21 years old:

• (i) senior employees (“Employees”) of the Company or its subsidiaries; and

• (ii) executive directors (“Executive Directors”) of the Company or its subsidiaries.

(c) Limitation on the size of the Scheme

• (i) The maximum number of underlying Shares comprised in Options that may be granted under this Scheme must not exceed 5% of the issued share capital as at the date Shareholders approve this Scheme (“Scheme Limit”). Based on an issued share capital of 557,058,400 as at the Latest Practicable Date, it is expected that the Company may grant Options to subscribe for up to 27,852,920 Shares.

• (ii) The Company may seek Shareholders’ approval to “refresh” the limit under the Scheme, in accordance with the Listing Rules. The maximum number of underlying Shares comprised in Options that may be granted under this Scheme under the “refreshed” limit must not exceed 5% of the issued share capital as at the date Shareholders approve the “refreshed” limit (“Refreshed Scheme Limit”).

• (iii) Notwithstanding the provisions in (i) and (ii) above, the Company shall suspend granting further Options under this Scheme if such grant will cause the aggregate number of Shares which may be issued upon exercise of all outstanding unexercised options granted under this Scheme and under the Expired Scheme to exceed 30% of the issued share capital at the relevant time.

• (iv) Notwithstanding the foregoing provisions in (i) and (ii) above, but subject to (iii) above, the Company may seek separate approval from Shareholders in general meeting to grant Options beyond the Scheme Limit or the Refreshed Scheme Limit to select Participants. For this purpose, the Company must issue a circular which contains a generic description of the specified Participants, the number and terms of the Options to be granted, the purpose of granting the Options, an explanation as to how the terms of the Options serve such purpose and other requisite information.

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APPENDIX I PRINCIPAL TERMS OF THE PROPOSED UPI STOCK OPTION SCHEME

(d) Maximum entitlement of each Participant under the Scheme

• (i) The total number of Shares issued and to be issued upon exercise of the Options granted to each Participant in any 12-month period shall not exceed 1% (one percent) of the issued shares (“Maximum Entitlement”), save as otherwise provided in paragraph (e) below.

• (ii) Shareholders’ approval is required for any proposed grant of Options to any Participant in excess of his Maximum Entitlement (including exercised, cancelled and outstanding Options) in the 12-month period up to the date of the proposed grant. For this purpose, a general meeting must be convened in accordance with the relevant procedural requirements under the Listing Rules, including the issue of a circular, and at such meeting, the Participant and his associates shall abstain from voting. The circular must disclose the identity of the Participant, the number and terms of the options to be granted (and options previously granted to such Participant), the information required under Listing Rule 17.02(2)(d) and the disclaimer required under Listing Rule 17.02(4).

(e) Options to Connected Persons

• (i) Options to be offered under this Scheme to any Participant who is an Executive Director, chief executive, Substantial Shareholder of the Company or any of their respective associates shall require the prior approval of independent non-executive directors of the Company.

• (ii) Shareholders’ approval at a general meeting is required for any proposed grant of Options to a Participant who is a Substantial Shareholder or his associates if such proposed grant would result in underlying Shares issued and to be issued upon exercise of all Options granted or to be granted to such person (including Options exercised, cancelled or outstanding) in the 12-month period up to and including the date of such proposed grant:

• (1) representing in aggregate over 0.1% of the issued Shares at such time, and

• (2) having an aggregate value exceeding HK$5 million based on the closing price of the Shares at the date of each grant.

For the avoidance of doubt, shareholders’ approval must be obtained only if both conditions (1) and (2) above are met.

• (iii) Shareholders’ approval at a general meeting is also required for any change in the terms of Options granted to a Substantial Shareholder or his associates.

• (iv) A general meeting convened for the purposes of (ii) and (iii) above must comply with the requirements of Listing Rule 17.04, including the issue of a circular to shareholders. At the meeting, all “connected persons” (as defined in Listing Rule 1.01) of the Company must abstain from voting in favour. Any vote taken at the meeting must be taken on a poll, and in compliance with the requirements of the Listing Rules.

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APPENDIX I PRINCIPAL TERMS OF THE PROPOSED UPI STOCK OPTION SCHEME

(f) Grant of Options subject to vesting

The Board, on the recommendation of the Committee, may grant Options at any time at its discretion, including as to the number of Shares comprised in Options (subject to the approvals of independent non-executive directors or shareholders, if necessary). For this purpose, the Committee may take into consideration the Participant’s position and rank, past performance, years of service, past contribution or potential contribution to the success and development of the Company or the Group and other relevant criteria.

All Options shall be subject to vesting over 3 years at the rate of one-third each year on the annual anniversary of the date of grant. The vesting of Options is not conditional upon the achievement of performance targets or subject to other conditions unless so determined, by the Board, on the recommendation of the Committee, at its absolute discretion.

(g) Restrictions on time of grant

No grant of Options may be made after a price sensitive event has occurred or a price sensitive matter has been the subject of a decision until such price sensitive information has been published in the newspapers. In particular, no grant of Options may be made during the period commencing one (1) month immediately preceding the earlier of (i) the date of the Board meeting for the approval of the Company’s annual or interim results, and (ii) the deadline for the Company to publish an announcement of its annual or interim results, and ending on the date of the results announcement.

(h) Offer and acceptance of Options

The offer to grant an Option (“Offer”) shall be substantially in the form set out in Appendix A to the Rules. The Offer shall be accepted within thirty (30) days from the date thereof (“Date of Grant”), and if not timely accepted, the Offer shall automatically lapse. The acceptance shall be substantially in the form set out in Appendix B to the Rules, accompanied by payment of HK$1.00 as consideration.

(i) Exercise Price

The subscription price for each Share upon exercise of the Option (the “Exercise Price”) will be determined by the Board, on the recommendation of the Committee, at its absolute discretion provided that it shall be at least the highest of:

• (a) the closing price of the Shares as stated in the Exchange’s daily quotations sheet on the Date of Grant which must be a business day,

• (b) the average closing price of the Shares as stated in the Exchange’s daily quotations sheets for the five (5) consecutive Market Days immediately preceding the Date of Grant; or

• (c) the nominal value of the Share,

in all instances, rounded up to the nearest whole cent (if applicable).

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APPENDIX I PRINCIPAL TERMS OF THE PROPOSED UPI STOCK OPTION SCHEME

(j) Exercise Period

The period during which Options can be exercised shall be determined by the Board, on the recommendation of the Committee, on a case by case basis at its absolute discretion, but shall not exceed ten (10) years from the Date of Grant in any event.

(k) Exercise of Options

Options can be exercised only after vesting during the Exercise Period applicable to that Option. Notice of exercise must be given in writing to the Company, substantially in the form set out in Appendix C to the Rules, together with a remittance of the Aggregate Subscription Cost in respect of the Shares for which that Option is exercised and any other documentation the Committee may require. The Company shall, within seven (7) business days after the exercise of an Option, allot and issue the relevant Shares.

(l) Voting, dividend, and transfer rights

Until they are exercised, Options do not carry any voting or dividend rights. Shares issued on exercise of an Option rank pari passu with all fully paid Shares then in issue for all entitlements, including dividends or other distributions, the Record Date for which is on or after the relevant Exercise Date.

An Option is personal to the Grantee and may not be transferred, assigned, charged or otherwise dealt with.

(m) Rights on termination of employment, death or disability

• (i) If a Grantee is terminated as an employee of the Company or any Group Company without Cause (as defined in the Rules), or if he resigns with Good Reason (as defined in the Rules), or if he retires at or after the legal retirement age, all Options then held by him shall immediately vest and be exercisable within six (6) months of the date of termination or retirement, whereupon all unexercised Options shall lapse without any claim against the Company.

• (ii) Under the following circumstances, Options which are unvested, and Options which are unexercised, will immediately lapse without any claim against the Company: (1) if a Grantee is terminated as an employee of the Company or a Group company with Cause; (2) if a Grantee resigns from his employment with the Company or a Group company without Good Reason; or (3) upon the bankruptcy of any Grantee, or the happening of any other event which results in his being deprived of the legal or beneficial ownership of such Option.

• (iii) If a Grantee ceases to be employed by the Company or any of its subsidiaries by reason of his: (1) ill health, injury or disability; or (2) retirement before the legal retirement age with the consent of the Board, or (3) any other reason approved in writing by the Board, on the recommendation of the Committee, the Board, at its absolute discretion, may allow him to exercise the Options.

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APPENDIX I PRINCIPAL TERMS OF THE PROPOSED UPI STOCK OPTION SCHEME

• (iv) If a Grantee dies, all the Options shall be exercised by his legal or personal representatives within twelve (12) months after his death.

• (v) If an Executive Director resigns or is terminated from his office as director or is not re-elected by shareholders, for any reason whatsoever, the Board, on the recommendation of the Committee, at its absolute discretion, may allow him to exercise the whole or any part of Options he holds within such period determined by the Committee, and thereafter the Options shall lapse.

• (n) Take-over, scheme of arrangement and winding-up

• (i) In the event a general offer which is unconditional in all respects is made for the Shares (whether by takeover offer, merger, privatisation, or in any analogous manner), the Grantees shall be entitled to exercise all outstanding and unexercised Options held by them in the period commencing on the date on which such offer is made and ending on the earlier of (1) the expiry of the offer period, unless extended, or (2) the date of expiry of the Exercise Period relating to such Options, and thereafter the Options then remaining unexercised shall lapse. Provided that , if the general offer is conditional, the Options shall only become exercisable from the date the offer becomes or is declared unconditional in all respects, and ending on the earlier date specified in (1) and (2) above, whereupon the Options then remaining unexercised shall lapse.

• (ii) If a scheme of arrangement (“Scheme”) under the Act is proposed in connection with the amalgamation of the Company with another company or companies, the Company shall give notice thereof to all Grantees on the same day it gives such notice of the Scheme to all Shareholders (“Notice Date”). Subject to the condition that the Scheme is subsequently sanctioned by the court and becomes effective, the Grantees shall be entitled to exercise all outstanding and unexercised Options held by them in the period commencing from the Notice Date and ending on the earliest of: (1) the expiry of two (2) months after the Notice Date; (2) the date the Scheme is sanctioned by the Court and becomes effective; or (3) the date of expiry of the Exercise Period relating to such Options, whereupon the Options then remaining unexercised shall lapse.

Provided, however , that (1) the Company may thereafter require such Grantee to transfer or otherwise deal with the Shares issued upon his exercise of the Options so as to place the Grantee in the same position or as nearly as would have been the case had such Shares been subject to the Scheme; and (2) if the court makes an order in relation to such outstanding Options, the court order shall in all instances prevail to the extent of any inconsistency with the provisions of paragraph (ii) above. Save as otherwise provided above, all Options will lapse automatically on the day next following the date the proposed Scheme becomes effective.

• (iii) If an order is made for the winding-up of the Company on the basis of its insolvency, all Options, to the extent unexercised, shall lapse forthwith.

• (iv) In the event of a Shareholders’ solvent voluntary winding-up, the Grantee shall be entitled, within four (4) weeks of the passing of the resolution to wind-up (but not after the expiry of the Exercise Period relating thereto), to exercise any unvested or unexercised Options, after which such unexercised Options shall lapse.

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APPENDIX I PRINCIPAL TERMS OF THE PROPOSED UPI STOCK OPTION SCHEME

• (v) If in connection with the making of a general offer referred to in paragraph (n)(i) above, or the scheme referred to paragraph (n)(ii) above, or the voluntary winding-up referred to in paragraph (n)(iv) above, arrangements are made (which are confirmed in writing by the Auditors to be fair and reasonable) for the compensation of Grantees, whether by the continuation of their Options or the payment of cash or the grant of other options or otherwise, a Grantee holding an Option, as yet not exercised, may not be permitted to exercise that Option.

(o) Suspension, cancellation and lapsing of Options

• (i) The Committee may suspend the exercise of any Option for any period not exceeding in aggregate sixty (60) days in any one year.

• (ii) The Board, on the recommendation of the Committee, may cancel unexercised Options on such terms as may be agreed with the relevant Grantee. The Board may also issue new options to the same Grantee to replace cancelled Options. The issue of such new options may only be made under a scheme with available unissued options (excluding the cancelled Options) within the limits approved by Shareholders as set out in paragraph (c) above (limitation on Scheme size).

• (iii) An Option shall lapse automatically and become null and void on the earliest of: (1) the expiry of the Exercise Period relating to that Option; (2) the expiry of any of the relevant periods referred to paragraph (m) relating to termination of employment; and (3) the expiry of any of the relevant periods referred to in paragraph (n) relating to a takeover, scheme of arrangement and winding up.

(p) Adjustment of Exercise Price and Shares

If a variation in the issued ordinary share capital of the Company shall take place by way of a capitalization of profits or reserves, rights issue, subdivision or consolidation of Shares, reduction of capital, or capital distribution, the Board, on the recommendation of the Committee shall determine whether the Exercise Price, the nominal amount, class or number of Shares comprised in an Option to the extent unexercised, and the nominal amount, class or number of Shares over which Options may be granted under the Scheme, shall be adjusted and, if so, the manner in which such adjustment shall be made. Any such adjustment must give the Grantees the same proportion of equity capital as that to which he was previously entitled provided that the Exercise Price payable shall not be less than the nominal value of the Share; and the adjustment must not give a Grantee any benefit that a Shareholder does not receive.

In respect of an adjustment (other than on a capitalization issue) the Auditors shall confirm to the Board in writing that the adjustments satisfy the requirements of this paragraph (p).

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APPENDIX I PRINCIPAL TERMS OF THE PROPOSED UPI STOCK OPTION SCHEME

(q) Alterations to the Scheme

• (i) The provisions of the Scheme may be altered by the Committee at its sole discretion except that the provisions relating to matters set out in Rule 17.03 of the Listing Rules cannot be altered to the advantage of Participants without the prior approval of Shareholders in general meeting.

• (ii) Any material alteration to the provision of the Rules or any change to the terms of Options granted must be approved by Shareholders, except where the alteration take effect automatically under the existing terms of the Scheme.

• (iii) The amended terms of the Scheme or of the Options must comply with the relevant requirements of Chapter 17 of the Listing Rules.

• (iv) Any change to the authority of the directors or the Committee in relation to any alteration of the terms of the Scheme must be approved by Shareholders in general meeting.

(r) Duration of the Scheme

The Scheme shall have a life of ten (10) years from the date it is adopted by Shareholders, unless earlier terminated by the Board at its discretion, in which event, no further Options will be granted or accepted but the provisions of the Scheme shall remain in force in all other respects. The expiration or earlier termination of the Scheme shall not affect outstanding Options which shall continue to vest and may be exercised in accordance with the terms of grant and the provisions of this Scheme.

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NOTICE OF SPECIAL GENERAL MEETING

APPENDIX II

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United Pacific Industries

UNITED PACIFIC INDUSTRIES LIMITED

(incorporated in Bermuda with limited liability)

(Stock Code: 00176)

NOTICE IS HEREBY GIVEN that a special general meeting of the shareholders of United Pacific Industries Limited (the “Company”) will be held at Flat B, 19/F, Chai Wan Industrial Centre, 20 Lee Chung Street, Chai Wan, Hong Kong on Monday, 30 August 2004 at 10:30 a.m. (or so soon after the conclusion or adjournment of the annual general meeting of the Company to be held at 10:00 a.m. on the same day and at the same place) for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolution as an ordinary resolution of the Company:

ORDINARY RESOLUTION

“That, conditional upon The Stock Exchange of Hong Kong Limited granting the listing of and permission to deal in any ordinary shares of HK$0.10 each in the capital of the Company (the “Shares”) to be issued pursuant to the exercise of options that may be granted under the new stock option scheme of the Company (the “Scheme”) (a copy of which has been produced to the meeting marked “ A ” and signed by the Chairman of this meeting for the purpose of identification):

• (i) the Scheme be and is hereby approved and adopted by the Company with effect from the date hereof;

• (ii) the Board of Directors of the Company (the “Board”) be and is hereby authorized to administer the Scheme and grant Options in accordance with the rules and provisions of the Scheme, and to delegate such authority to the Compensation Committee of the Board; and

• (iii) the Board be and is hereby authorized to allot and issue Shares pursuant to the exercise of Options under and in accordance with the Scheme.”

By order of the Board of Directors United Pacific Industries Limited Brian Cyril Beazer Executive Chairman

Hong Kong, 9 August 2004

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NOTICE OF SPECIAL GENERAL MEETING

APPENDIX II

Registered Office Clarendon House Church Street Hamilton HK 11 Bermuda

Principal Place of Business in Hong Kong Flat B, 19th Floor Chai Wan Industrial Centre 20 Lee Chung Street Chai Wan, Hong Kong

Notes:

1. Any member entitled to attend and vote at the meeting is entitled to appoint up to two proxies to attend and vote in his stead. A proxy need not be a member of the Company.

2. To be valid, a form of appointment of proxy and/or corporate representative, together with a power of attorney or other authority, if any, under which it is signed, or a notarially certified copy thereof, must be delivered to the principal place of business of the Company in Hong Kong at Flat B, 19/F, Chai Wan Industrial Centre, 20 Lee Chung Street, Chai Wan, Hong Kong not later than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

3. The Register of Members will be closed from Wednesday, 25 August 2004 to Monday, 30 August 2004 (both days inclusive), during which period, no transfer of shares will be registered. In order to determine the identity of members who are entitled to attend and vote at the SGM, all transfers accompanied by the relevant share certificates must be lodged with the Company’s Hong Kong Share Registrar, Secretaries Limited of G/F, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not later than 4:00 p.m. on Tuesday, 24 August 2004.

4. The directors of the Company as at the date of this notice are: Mr Brian C Beazer, Mr Simon N Hsu, Mr Wong Hei Pui, Andy (being executive directors), Mr Ho Che Kong, Mr Ng Ching Wo, Mr Ramon Sy Pascual, Mr Peter F Reilly, Mr Teo Ek Tor (being non-executive directors) and Dr Wong Ho Ching, Chris (being independent non-executive director).

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PROCEDURE FOR DEMANDING A POLL

APPENDIX III

Pursuant to Byelaw 73 of the Byelaws of the Company, a resolution put to the vote of the 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 the meeting; or

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

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

• (d) by any shareholder or shareholders present in person (or, in the case of a shareholder being a corporation, by its duly authorized 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 the shares conferring that right.

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