Shimao Group Holdings Limited — Proxy Solicitation & Information Statement 2013

May 22, 2013

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult 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 Shimao Property Holdings Limited, you should at once hand this circular and the enclosed 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.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly 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.

==> picture [162 x 65] intentionally omitted <==

SHIMAO PROPERTY HOLDINGS LIMITED 世茂房地產控股有限公司

(Incorporated in the Cayman Islands with limited liability) (Stock code: 813)

PROPOSED ADOPTION OF SHARE OPTION SCHEME BY SHANGHAI SHIMAO CO., LTD. AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

A letter from the Board is set out on pages 3 to 8 of this circular.

A notice convening the extraordinary general meeting of Shimao Property Holdings Limited to be held at Chief Executive Suite III, Level 5, Grand Hyatt Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on Monday, 17 June 2013 at 11:30 am (or immediately after the conclusion or, as the case maybe, adjournment of the annual general meeting of the Company scheduled at 11:00 am on the same day and at the same place as the extraordinary general meeting as aforesaid, if later) is set out on pages 20 and 21 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 it to the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the extraordinary general meeting or any adjourned meeting thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the extraordinary general meeting or at any adjourned meeting thereof should you so desire.

23 May 2013

CONTENTS

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Proposed adoption of the Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Value of the Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Conditions to the Scheme becoming effective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
APPENDIX – SUMMARY TERMS OF THE SCHEME . . . . . . . . . . . . . . . . . . . . . . . . . .	9
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20

• i -

DEFINITIONS

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

“A Share(s)” share(s) of Shanghai Shimao which are listed on the Shanghai Stock Exchange and traded and denominated in RMB

“Board”	the board of Directors
“Company”	Shimao Property Holdings Limited, an exempted company
	incorporated with limited liability in the Cayman Islands, the
	securities of which are listed on the main board of the	Hong Kong
	Stock Exchange
“Conditions”	conditions to be fulfilled for the Scheme to become	effective in
	accordance with the terms of the Scheme
“connected person(s)”	shall have the meaning ascribed to it under the Listing	Rules
“CSRC”	China Securities Regulatory Commission of the PRC
“Director(s)”	the director(s) of the Company
“EGM”	an extraordinary general meeting of the Company to be convened
	and held on Monday, 17 June 2013 to approve the adoption of the
	Scheme by Shanghai Shimao
“Grant”	the grant of the Options to the Participants by the Shanghai Shimao
	Board in accordance with the terms of Scheme
“Group”	the Company and its subsidiaries from time to time
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Hong Kong Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Incentive Measures”	the Administrative Measures on Share Incentives	of Listed
	Companies (上市公司股權激勵管理辦法)
“Latest Practicable Date”	16 May 2013, being the latest practicable date prior to	the printing
	of this circular for the purpose of ascertaining certain	information
	contained herein
“Listing Rules”	the Rules Governing the Listing of Securities on the Hong Kong
	Stock Exchange (as amended from time to time)

• 1 -

DEFINITIONS

“Memorandum”	the Memorandum on Issues Relating to Share Option Incentives
	No.1, 2 and 3 (股權激勵有關事項備忘錄1、2、3號)
“Option(s)”	the right to be granted to a Participant to acquire certain number of
	A Shares at a pre-determined price in a particular period of time and
	subject to certain conditions under the Scheme
“Participant(s)”	the person(s) to be granted Option(s) under the Scheme
“PRC”	the People’s Republic of China
“PRC Company Law”	the Company Law of the PRC
“RMB”	Renminbi, the lawful currency of the PRC
“Scheme”	the proposed share option incentive scheme of Shanghai Shimao
	conditionally adopted by Shanghai Shimao
“Securities Law”	the Securities Law of the PRC
“Shanghai Shimao”	Shanghai Shimao Co., Ltd. (上海世茂股份有限公司), a company
	incorporated in the PRC and the shares of which are listed on the
	Shanghai Stock Exchange (Stock Code: 600823.SH) (the Company
	has approximately 64.22% attributable interest in Shanghai Shimao)
“Shanghai Shimao Board”	the board of directors of Shanghai Shimao
“Shanghai Shimao Shareholders”	the holders of the A Shares
“Shareholders”	the holders of the Shares
“Share(s)”	ordinary share(s) of HK$0.10 each in the share capital of the
	Company
“Validity Period”	the period during which the Scheme remains effective

• 2 -

LETTER FROM THE BOARD

==> picture [162 x 65] intentionally omitted <==

SHIMAO PROPERTY HOLDINGS LIMITED 世茂房地產控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 813)

Executive Directors:

Mr. Hui Wing Mau (Chairman) Mr. Hui Sai Tan, Jason (Vice Chairman) Mr. Liu Sai Fei Mr. Xu Younong Ms. Tang Fei Mr. Liao Lujiang

Independent Non-executive Directors:

Ms. Kan Lai Kuen, Alice Mr. Lu Hong Bing Mr. Lam Ching Kam

Registered Office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Principal place of business in Hong Kong: Units 4307-12, 43rd Floor, Office Tower Convention Plaza, 1 Harbour Road Wanchai Hong Kong

23 May 2013

To the Shareholders

Dear Sir or Madam,

PROPOSED ADOPTION OF SHARE OPTION SCHEME BY SHANGHAI SHIMAO CO., LTD.

Reference is made to the announcement of the Company dated 12 April 2013 in relation to the proposed adoption of share option scheme by Shanghai Shimao, a subsidiary of the Company and a company established in the PRC whose shares are listed on the Shanghai Stock Exchange.

On 11 April 2013, Shanghai Shimao Board conditionally adopted the Scheme. At the EGM, ordinary resolution will be proposed to the Shareholders to approve the adoption of the Scheme by Shanghai Shimao.

The purpose of this circular is to provide you with further details of the Scheme.

• 3 -

LETTER FROM THE BOARD

PROPOSED ADOPTION OF THE SCHEME

The purpose of the Scheme is to further optimize the corporate governance structure, establish and improve the incentive and discipline mechanism of Shanghai Shimao, unleash motivation of the management, function as a measure to attract and retain quality executives, align the interests of Shanghai Shimao Shareholders and corporate interests with personal interests of the management for building a common vision of long-term development of Shanghai Shimao, and to provide individual employees with incentives through profit sharing, thus securing the sustainable healthy development of Shanghai Shimao.

Options will be granted under the Scheme as incentives to selected Participants. The shares subject to the Options are A Shares. Participants who are granted with the Options will be entitled to acquire A Shares at a pre-determined price during the exercise period of the relevant Options, subject to the fulfilment of the relevant conditions and the terms of the Scheme. The A Shares issued upon the exercise of the Options, shall rank pari passu in all respects with the existing issued and paid-up A Share capital including the voting, dividend, transfer and other rights attached to the A Shares in issue, except that those A Shares acquired by any director or senior management of Shanghai Shimao pursuant to the exercise of the Options are not transferrable within half a year after he/she terminates his/her employment with Shanghai Shimao. The Options granted are not transferrable. No dividend will be payable and no voting rights will be exercisable in relation to the Options that have not been exercised.

The number of A Shares which will be issued under the Options which may be granted under the Scheme is 10,000,000 A Shares, representing approximately 0.85% of the total number of A Shares in issue as at the Latest Practicable Date if all the Options are exercised.

The proposed Participants of the Scheme include directors, senior management and mid-level key managerial personnel of Shanghai Shimao, totalling 18 individuals, which represents 0.8% of the total number of employees of Shanghai Shimao as at 31 December 2012. The details of the proposed Participants of the Options under the Scheme as set out in the paragraphs headed “Source and number of A Shares under the Scheme – (3) Allocation of the Options under the Grant” in the Appendix to this circular. Two of the proposed Participants under the Scheme, namely Ms. Hui Mei Mei, Carol and Mr. Lee Chun Kit, William are connected persons of the Group. Ms. Hui Mei Mei, Carol is the daughter of Mr. Hui Wing Mau, a director and the chairman of the Company as well as substantial Shareholder who held interest in 2,216,437,442 Shares representing approximately 63.83% of the total issued share capital of the Company as at the Latest Practicable Date. Ms. Hui Mei Mei, Carol is also the sister of Mr. Hui Sai Tan, Jason, a director and the vice chairman of the Company. Mr. Lee Chun Kit, William is the husband of Ms. Hui Mei Mei, Carol and the son-in-law of Mr. Hui Wing Mau.

The Shanghai Shimao Board will, within 30 days from the date of fulfillment of the Conditions, grant all the Options to the Participants in accordance with applicable rules on a date determined by the Shanghai Shimao Board. No amount is payable on application or acceptance of the Option by the grantees of the Options.

The exercise of the Options under the Grant is subject to a restriction of 12 months from the date of Grant, during which period the Options are not exercisable. Subject to the fulfillment of various conditions as provided in the Scheme, the Options granted under the Scheme can be exercised in two batches commencing from (i) the first trading day after the expiry of the 12-month period from the date of Grant and (ii) the first trading day after the expiry of the 24-month period from the date of Grant respectively, and the details of

• 4 -

LETTER FROM THE BOARD

which are set forth in the paragraphs headed “Exercise Periods” in the Appendix to this circular. The 12 months restriction period may provide incentives to the Participants to remain employed with Shanghai Shimao during such period and thereby enable Shanghai Shimao to benefit from the continued service of such Participants, thus providing long-term rewards and retention incentives to the Participants and attract and retain human resources that are valuable to the growth and development of Shanghai Shimao as a whole.

In addition, the Options may only be exercised by the Participants upon achieving certain performance targets as set out in the Scheme. These include achieving certain grading by the Participant in his/her performance appraisal under the appraisal methods of Shanghai Shimao according to the “Measures for Performance Appraisal for the Share Option Incentive Scheme of Shanghai Shimao Co., Ltd.” (上海世茂股份有限公司股 票期權激勵計劃實施考核辦法) and other financial performance target by Shanghai Shimao. For details, please refer to the paragraphs headed “Conditions of exercise of Options” in the Appendix to this circular. These requirements, together with the restriction period as mentioned above, may enable Shanghai Shimao to provide incentives to the Participants to motivate their pro-activeness in using best endeavours to facilitate the growth and development of Shanghai Shimao. The above also correlates their interests with the long term development of Shanghai Shimao.

The exercise price of the Options proposed to be granted under the Scheme shall be RMB9.84 per A Share, which is the higher of the followings:

• (i) the closing price of the A Shares quoted on the Shanghai Stock Exchange on the last trading day immediately preceding the date of the announcement on the draft of the Scheme made by Shanghai Shimao (i.e. 11 April 2013), which was RMB9.74 per A Share; and

• (ii) the average of the closing prices of the A Shares quoted on the Shanghai Stock Exchange for the last 30 trading days immediately preceding the date of the announcement on the draft of the Scheme made by Shanghai Shimao, which was RMB9.84 per A Share.

Note 1 to Rule 17.03(9) of the Listing Rules requires that the exercise price must be at least the higher of (i) the closing price of securities as stated in the daily quotations sheet of the Hong Kong Stock Exchange on the date of grant; and (ii) the average closing price of the securities as stated in the daily quotations sheets of the Hong Kong Stock Exchange for the five business days immediately preceding the date of grant. Note 2 to Rule 17.03(9) provides that the aforesaid requirement does not apply to a share option scheme of a subsidiary of the listed issuer if the subsidiary's securities are not listed on the Hong Kong Stock Exchange. Given the Scheme is a proposed share option scheme of Shanghai Shimao, a subsidiary of the Company and a company established in the PRC whose shares are listed on the Shanghai Stock Exchange, no waiver from the strict compliance of Note 1 to Rule 17.03(9) of the Listing Rules needs to be obtained.

In the event of any capitalisation issue, bonus issue or sub-division or consolidation of share capital in Shanghai Shimao, allotment of A Shares to existing Shanghai Shimao Shareholders, new issue of A Shares and declaration of dividend of Shanghai Shimao subsequent to the date of the announcement on the Scheme by Shanghai Shimao, the number of Options and exercise price shall be adjusted in accordance with the terms of the Scheme. For details, please refer to the paragraphs headed “Adjustments” in the Appendix to this circular. In respect of any such adjustments, other than any made on a capitalisation issue, an independent financial adviser or the Group’s auditors will review and confirm to the Directors in writing that the adjustments satisfy the requirements set out in the note to Rule 17.03(13) of the Listing Rules.

• 5 -

LETTER FROM THE BOARD

In respect of the operation of the Scheme, Shanghai Shimao will, where applicable, comply with the relevant requirements under Chapter 17 of the Listing Rules. Where the terms of the Scheme require any related matters to be approved by the shareholders/independent non-executive directors of Shanghai Shimao, such matters shall be simultaneously approved by the Shareholders/independent non-executive directors of the Company in compliance with the Listing Rules.

None of the Directors is a trustee of the Scheme nor has any direct or indirect interest in the trustees. To the extent that the Company is aware having made all reasonable enquiries, none of the Shareholders is required to abstain from voting on the resolution proposed to be passed at the EGM.

VALUE OF THE OPTIONS

Shanghai Shimao used the Black-Scholes model to calculate the value of the Options.

Assumptions and data used in and results of the calculation are as follows:

Factors Amount of factors and descriptions Exercise price RMB9.84 per A Share, which is determined on the basis set out above Market price RMB10.33, being the estimated market price as at the date of Grant with reference to the exercise price (assuming there is 5% increase in the market price of A Share of RMB9.84 per A Share) (actual value of the granted Options shall be the closing price of the A Share on the date of Grant) Expected life The validity period of the Options granted for the first batch of the exercisable Options and the second batch of the exercisable Options being two years and three years respectively (The exercise of the Options under the Grant is subject to a restriction of 12 months from the date of Grant. The Options granted under the Scheme can be exercised in two batches commencing from (i) the first trading day after the expiry of the 12-month period from the date of Grant and (ii) the first trading day after the expiry of the 24-month period from the date of Grant respectively) Expected price volatility rate Price volatility rates of A Shares of 31.11%, which is determined based on the fluctuation of market price of A Shares for the year preceding the announcement of the proposed Scheme by Shanghai Shimao

Risk-free interest rate The benchmark interest rate of 3% for one-year fixed deposit in RMB and 3.75% for two-year fixed deposit in RMB set by the People’s Bank of China on 6 July 2012 for the first exercisable period and the second exercisable period respectively

Expected number of 10,000,000 A Shares on the assumption that all the Options under the exercisable Options Scheme are exercised

• 6 -

LETTER FROM THE BOARD

The value of the Options estimated based on the above are set out below:

Exercisable period First exercise period Second exercise period Total	Number of Options Value of each Option (RMB) 5,000,000 2.36 5,000,000 2.95 10,000,000	Fair value of the Options (RMB) 11,800,000 14,750,000
		26,550,000

The calculation results of the value of the Options are subject to a number of assumptions and parameters used herein and the limitation of the model adopted, therefore the estimated value of the Options may be subjective and uncertain.

CONDITIONS TO THE SCHEME BECOMING EFFECTIVE

The Scheme shall become effective upon satisfaction of various conditions, being (i) the filing process having been completed and CSRC having no objection to the Scheme, (ii) approval of the Scheme by the shareholders of Shanghai Shimao at its general meeting and (iii) approval by the Shareholders of the adoption of the Scheme by Shanghai Shimao.

EGM

The notice convening the EGM is set out on pages 20 and 21 of this document.

A form of proxy for use at the EGM is enclosed herewith. Whether or not you are able to attend the EGM, you are requested to complete the form of proxy and return it to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding of the EGM. Completion and returning of a form of proxy will not preclude you from attending and voting at the EGM or any adjourned meetings if you so wish.

Pursuant to Rule 13.39(4) of the Listing Rules, the resolution set out in the notice of the EGM will be decided by poll. The poll results will be published on the Company’s website at www.shimaoproperty.com and HKExnews website at www.hkexnews.hk after closure of the EGM.

RECOMMENDATION

The Directors (including the independent non-executive directors but excluding Mr. Hui Wing Mau and Mr. Hui Sai Tan, Jason who abstained from voting on the relevant board resolutions due to Ms. Hui Mei Mei, Carol and Mr. Lee Chun Kit, William’s interests in the proposed grant of Options under the Scheme) consider that the proposed ordinary resolution for approving the adoption of the Scheme by Shanghai Shimao is in the interests of the Company and its Shareholders as a whole and is fair and reasonable, and recommend the Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM.

• 7 -

LETTER FROM THE BOARD

ADDITIONAL INFORMATION

A summary of the principal terms of the Scheme is set out in the Appendix to this circular. A copy of the draft Scheme proposed to be adopted by Shanghai Shimao and to be approved by the Shareholders at the EGM will be available for inspection at the principal place of business in Hong Kong at Units 4307-12, 43rd Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong during normal business hours from the date of this circular up to and including the date of the EGM and at the EGM.

RESPONSIBILITY STATEMENT

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

Yours faithfully, For and on behalf of the Board Shimao Property Holdings Limited Hui Wing Mau Chairman

• 8 -

SUMMARY TERMS OF THE SCHEME

APPENDIX

A summary of the major terms of the Scheme is set out below.

1. PURPOSE OF THE SCHEME

The Scheme is to further optimize the corporate governance structure, establish and improve the incentive and discipline mechanism of Shanghai Shimao, unleash motivation of the management, function as a measure to attract and retain quality executives, align the interests of Shanghai Shimao Shareholders and corporate interests with personal interests of the management for building a common vision of long-term development of Shanghai Shimao, and to provide individual employees with incentives through profit sharing, thus securing the sustainable healthy development of Shanghai Shimao.

2. PARTICIPANTS

(1) Basis for determining the Participants

The Participants are subject to and determined in accordance with the PRC Company Law, the Securities Law, the Incentive Measures, the Memorandum, the relevant provisions of the articles of association of Shanghai Shimao, the Listing Rules and other applicable laws, regulations and regulatory documents.

(2) Scope of Participants

The proposed Participants of the Scheme include directors, senior management and mid-level key managerial personnel of Shanghai Shimao, totalling 18 individuals, which represents 0.8% of the total number of employees of Shanghai Shimao as at 31 December 2012.

A person cannot be Participant if he/she:

• (1) has been publicly censured or declared as ineligible candidates by the Shanghai Stock Exchange within the previous three years;

• (2) has been imposed with administrative penalties by CSRC within the previous three years due to material non-compliance of laws and regulations; or

• (3) is prohibited from acting as director, supervisor or senior management under section 147 of the PRC Company Law.

3. SOURCE AND NUMBER OF A SHARES UNDER THE SCHEME

(1) Source of A Shares

Options will be granted under the Scheme as incentives to selected Participants. The shares subject to the Options are A Shares. Participants who are granted with the Options will be entitled to acquire A Shares at a pre-determined price during the exercise period of the relevant Options, subject to the fulfillment of the relevant conditions and the terms of the Scheme.

• 9 -

SUMMARY TERMS OF THE SCHEME

APPENDIX

(2) Number of underlying A Shares

The number of A Shares which will be issued under the Options which may be granted under the Scheme is 10,000,000 A Shares, representing approximately 0.85% of the total number of A Shares currently in issue if all the Options are exercised.

The total number of shares to be granted under the Scheme to an individual grantee will not exceed 1% of the total issued share capital of Shanghai Shimao.

(3) Allocation of the Options under the Grant

The list of Participants and the allocation of proposed grant of Options under the Scheme are as follows:

				Percentage of
				total issued
				capital of
				Shanghai
		Number of A	Percentage of	Shimao as at
		Shares under	the total	the Latest
	Position with	the Options	Options to be	Practicable
Participant	Shanghai Shimao	to be granted	granted (%)	Date (%)
Hui Mei Mei, Carol (許薇薇) (Note 1)	Vice Chairman,	1,200,000	12	0.10
	President
Zhou Liming (周黎明)	Director, Vice	600,000	6	0.05
	President
Song Yao (宋垚)	Vice President	600,000	6	0.05
Meng Jie (孟潔)	Vice President	600,000	6	0.05
Lee Chun Kit, William	Vice President	600,000	6	0.05
(李俊傑) (Note 2)
Zhang Zhen (張振)	Assistant President	600,000	6	0.05
Hu Shaoqing (胡紹清)	Assistant President	600,000	6	0.05
Wang Jiawen (王家文)	Assistant President	600,000	6	0.05
Zhang Jie (張杰)	Assistant President,	600,000	6	0.05
	Chief Financial
	Officer
Zhao Jun (趙軍)	Assistant President	600,000	6	0.05
Other 8 senior management and	Various	3,400,000	34	0.28
mid-level key managerial personnel
Total		10,000,000	100	0.83

• 10 -

SUMMARY TERMS OF THE SCHEME

APPENDIX

Notes:

• (1) Ms. Hui Mei Mei, Carol is the daughter of Mr. Hui Wing Mau, a director and the chairman of the Company as well as substantial Shareholder who held interest in 2,216,437,442 Shares representing approximately 63.83% of the total issued share capital of the Company as at the Latest Practicable Date. Ms. Hui Mei Mei, Carol is also the sister of Mr. Hui Sai Tan, Jason, a director and the vice chairman of the Company.

• (2) Mr. Lee Chun Kit, William is the husband of Ms. Hui Mei Mei, Carol and the son-in-law of Mr. Hui Wing Mau.

4. VALIDITY PERIOD AND DATE OF GRANT

(1) Validity period of the Scheme

Subject to completion of the relevant filing process and CSRC having no objection to the Scheme, the Scheme shall be effective commencing from the date of approval of the Scheme by Shanghai Shimao Shareholders and expire on the end of the 36-months period from the date of Grant.

• (2) Date of grant

The Shanghai Shimao Board will, within 30 days from the date of fulfillment of the Conditions, grant all the Options to the Participants in accordance with applicable rules on a date determined by the Shanghai Shimao Board. The date of Grant shall be a trading day and cannot fall in any of the following periods:

• (i) commencing from 30 days prior to the publication of the periodic reports of Shanghai Shimao Board (or if the date of publication of the periodic reports is postponed for any special reasons, such date shall also commence from 30 days prior to the original scheduled date of publication of the periodic reports) and ends on the expiry of two trading days after the publication of the relevant reports;

• (ii) commencing from 10 days prior to the publication of the results announcement of Shanghai Shimao Board and ends on the expiry of two trading days after the publication of the relevant results announcement;

• (iii) any time during the decision making process of a material transaction or significant event until two trading days after such transaction or event is announced; or

• (iv) any other period commencing from the date on which a significant event that is of price sensitive nature occurs until two trading days after such significant event is announced.

Shanghai Shimao will also ensure that the determination of the date of Grant satisfies the requirements under Rule 17.05 of the Listing Rules (the “Black-out Periods”).

• 11 -

SUMMARY TERMS OF THE SCHEME

APPENDIX

5. CONDITIONS OF THE GRANT

The following conditions must be fulfilled before the Participants are granted with the Options:

(1) Conditions to be fulfilled by Shanghai Shimao

• (i) issue of unqualified audited financial statements of Shanghai Shimao by its auditors for the financial year immediately preceding the proposed date of Grant;

• (ii) there has been no administrative penalties imposed by the CSRC due to material noncompliance of laws and regulations by Shanghai Shimao during the past one year; and

• (iii) there has been no other circumstances occurred as considered by the CSRC to be inappropriate for Shanghai Shimao to implement the Scheme.

• (2) Conditions to be fulfilled by the Participants

The Participant shall:

• (i) not have been publicly censured or declared as ineligible candidates by the Shanghai Stock Exchange within the previous three years;

• (ii) not have been imposed with administrative penalties by CSRC within the previous three years due to material non-compliance of laws and regulations; or

• (iii) satisfied all the requirements under the PRC Company Law and articles of Shanghai Shimao if he/she is a director or senior management.

6. EXERCISE PRICE AND BASIS OF DETERMINATION

(1) Exercise price of the Grant

The exercise price of the Options proposed to be granted under the Scheme shall be RMB9.84 per A Share.

• (2) Basis of determination

The above exercise price is the higher of the followings:

• (i) the closing price of the A Shares quoted on the Shanghai Stock Exchange on the last trading day immediately preceding the date of the announcement on the draft of the Scheme made by Shanghai Shimao (i.e. 11 April 2013), which was RMB9.74 per A Share; and

• 12 -

SUMMARY TERMS OF THE SCHEME

APPENDIX

• (ii) the average of the closing prices of the A Shares quoted on the Shanghai Stock Exchange for the last 30 trading days immediately preceding the date of the announcement on the draft of the Scheme made by Shanghai Shimao, which was RMB9.84 per A Share.

7. CONDITIONS OF EXERCISE OF OPTIONS

Options can only be exercised upon satisfaction of the following conditions:

(i) Achieving the following performance target by the relevant Participant:

The performance appraisal of the relevant Participant in the preceding year must reach grade B+ or above under the appraisal methods of Shanghai Shimao according to the “Measures for Performance Appraisal for the Share Option Incentive Scheme of Shanghai Shimao Co., Ltd.” (上海世茂股份有限公司股票期權激勵計劃實施考核辦法).

If a Participant who has been granted with Options does not reach grade B+, the Options granted to such Participant (to the extent not already exercised) shall lapse and will be cancelled.

• (ii) Achieving the following performance targets by Shanghai Shimao:

• (a) Each of (A) the net profit and (B) the net profit after extraordinary items attributable to Shanghai Shimao Shareholders for each of the financial year 2013 and 2014 of Shanghai Shimao shall not be lower than the average of the relevant financial figures for the three financial years immediately preceding the date of Grant and there shall not be a net loss or net loss after extraordinary items attributable to Shanghai Shimao Shareholders.

• (b) The revenue of Shanghai Shimao for the financial year 2013 shall increase by no less than 20% from that for the financial year 2012, whereas the revenue of Shanghai Shimao for the financial year 2014 shall increase by no less than 40% from that for the financial year 2012.

• (c) The net profit after extraordinary items of Shanghai Shimao for the financial year 2013 shall increase by no less than 15% from that for the financial year 2012, whereas the net profit after extraordinary items of Shanghai Shimao for the financial year 2014 shall increase by no less than 30% from that for the financial year 2012.

If Shanghai Shimao does not achieve the above performance targets, the Options granted to the Participants (to the extent not already exercised) shall lapse and will be cancelled.

• 13 -

SUMMARY TERMS OF THE SCHEME

APPENDIX

8. EXERCISE PERIODS

The exercise of the Options under the Grant is subject to a restriction of 12 months from the date of Grant, during which period the Options are not exercisable. Subject to the fulfillment of various conditions as provided in the Scheme, the Options granted under the Scheme can be exercised in two batches as follows:

		Percentage of
		Options exercisable
		to the total number
Exercise period	Duration	of Options granted
First exercise period	Commencing from the first trading day after	50%
	expiry of the 12-month period from the date
	of Grant and ending on the last trading day
	of the 24-month period from the date of
	Grant
Second exercise period	Commencing from the first trading day after	50%
	expiry of the 24-month period from the date
	of Grant and ending on the last trading day
	of the 36-month period from the date of
	Grant

Options are not exercisable beyond the exercise period stated above and the lapsed Options will be cancelled.

No Options can be exercised during the Black-out Periods.

9. ADJUSTMENTS

(1) Adjustment of number of Options

In the event of any capitalisation issue, bonus issue or sub-division or consolidation of share capital in Shanghai Shimao, the number of Options shall be adjusted as follows:

• (i) Capitalisation issue, bonus issue or sub-division of A Shares

Q = Q0 x (1 + n)

Where:

Q0 represents the number of Options before adjustment;

• 14 -

SUMMARY TERMS OF THE SCHEME

APPENDIX

n represents the ratio of increase per A Share resulting from the capitalisation issue, bonus issue or sub-division of A Shares (i.e. the number of increased A Share per A Share resulting from the capitalisation issue, bonus issue or subdivision of A Shares);

Q represents the adjusted number of Options.

• (ii) Consolidation of A Shares and reduction of capital in Shanghai Shimao

Q = Q0 x n

Where:

Q0 represents the number of Options before adjustment;

n represents the ratio of consolidation of A Shares (i.e. one A Share shall be consolidated into n A Shares) or ratio of reduction of A Share capital;

Q represents the adjusted number of Options.

• (iii) Allotment of A Shares to existing Shanghai Shimao Shareholders

Q = Q0 x P1 x (1 + n2) / (P1 + P2 x n2)

Where:

Q0 represents the number of Options before adjustment;

• P1 represents the closing price as at the record date;

P2 represents the subscription price of the A Shares to be allotted;

n2 represents the basis of the allotment of A Shares (i.e. the number of A Shares to be issued under the allotment in proportion to the total share capital in Shanghai Shimao before the allotment);

Q represents the adjusted amount of Options.

• 15 -

SUMMARY TERMS OF THE SCHEME

APPENDIX

(2) Adjustment of exercise price of the Options

In the event of any distribution of dividends, capitalisation issue, bonus issue or sub-division or consolidation of share capital in Shanghai Shimao, the exercise price of Options shall be adjusted as follows:

• (i) Capitalisation issue, bonus issue or sub-division of A Shares

P = P0 / (1 + n)

Where:

• P0 represents the exercise price of the Options before adjustment;

n represents the ratio of increase per A Share resulting from the capitalisation issue, bonus issue or sub-division of A Shares (i.e. the number of increased A Share per A Share resulting from the capitalisation issue, bonus issue or subdivision of A Shares);

P represents the adjusted exercise price of the Options.

• (ii) Allotment of A Shares to existing Shanghai Shimao Shareholders

P = P0 x (P1 + P2 x n) / [P1 x (1 + n)]

Where:

• P0 represents the exercise price of the Options before adjustment;

• P1 represents the closing price of A Share as at the record date;

• P2 represents the subscription price of the allotment;

n represents the basis of the allotment of A Shares (i.e. the number of A Shares to be issued under the allotment in proportion to the total share capital in Shanghai Shimao before the allotment);

P represents the adjusted exercise price of the Options.

• (iii) Consolidation of A Shares and reduction of capital in Shanghai Shimao

P = P0 ÷ n

Where:

• P0 represents the exercise price of the Options before adjustment;

• 16 -

SUMMARY TERMS OF THE SCHEME

APPENDIX

n represents the ratio of consolidation of A Shares (i.e. one A Share shall be consolidated into n A Shares) or ratio of reduction of A Share capital;

P represents the adjusted exercise price of the Options.

• (iv) Distribution of dividends

P = P0 – V

Where:

P0 represents the exercise price of the Options before adjustment;

V represents the amount of dividends per A Share;

P represents the adjusted exercise price of the Options and P shall not be less than RMB1.00 per A Share.

• (3) No adjustment to the number of Options or the exercise price of the Options will be made if there is any new issue of A Shares before the Options become exercisable.

10. SPECIAL CIRCUMSTANCES

(1) Change of control, amalgamation or spin-off

In the event of change of control, amalgamation or spin-off of the shareholding structure of Shanghai Shimao, the terms of the Scheme shall remain unchanged.

(2) Changes of circumstances on the part of the Participants

• (a) Change of position and dismissal

If a Participant is redesignated to a position within Shanghai Shimao or its subsidiaries in normal circumstances, the Options granted shall not be affected and the Options can be exercised in accordance with the Scheme. If a Participant is redesignated to position within the group of Shanghai Shimao due to his/her incompetence in performing his/her duties, failing to pass performance appraisal, breach of laws, misconduct, leaking confidential information or his/her incompetence results in damages of Shanghai Shimao’s interests or goodwill, or his/her employment is terminated due to the aforesaid reasons, the Options granted to such Participant which have not yet been exercised shall lapse upon the approval of the Shanghai Shimao Board and be cancelled.

• 17 -

SUMMARY TERMS OF THE SCHEME

APPENDIX

(b) Resignation

If the employment of a Participant with Shanghai Shimao is terminated due to his/her resignation, non-renewal upon the expiry of employment contracts or redundancy, the Options granted to such Participant which have not yet been exercised shall lapse upon the approval of the Shanghai Shimao Board and be cancelled.

(c) Retirement

If a Participant retires during the Validity Period, and he/she is re-employed by Shanghai Shimao, the Options granted shall not be affected and the Options can be exercised in accordance with the Scheme. If a Participant retires during the Validity Period and is not re-employed by Shanghai Shimao, the Options granted to such Participant which have not yet been exercised shall lapse and be cancelled.

(d) Incapacity

If the employment of a Participant with Shanghai Shimao is terminated due to his/her loss of capacity to work arose from work related injuries and he/she passes his/her performance appraisal after his/her loss of capacity to work, the Options granted shall not be affected and the Options can be exercised in accordance with the Scheme. If the employment of a Participant with Shanghai Shimao is terminated due to his/her loss of capacity to work arose from non-work related injuries, the Options granted to such Participant which have not yet been exercised shall lapse and be cancelled.

(e) Death

If a Participant dies, the Options granted to such Participant which have not yet been exercised shall lapse and be cancelled.

(f) Disqualification as a Participant

If any of the following occurs on a Participant during the Validity Period, he/she will be disqualified from being a Participant:

• (i) has been publicly censured or declared as ineligible candidates by the Shanghai Stock Exchange within the previous three years;

• (ii) has been imposed with administrative penalties by CSRC within the previous three years due to material non-compliance of laws and regulations;

• (iii) is no longer qualified for being a director or senior management according to the PRC Company Law; or

• 18 -

SUMMARY TERMS OF THE SCHEME

APPENDIX

• (iv) is being considered by the Shanghai Shimao Board to have committed material breach of the rules of Shanghai Shimao or have resulted in damages of the interests of Shanghai Shimao.

• (g) Others

Other unspecified circumstances shall be dealt with by the remuneration and appraisal committee of Shanghai Shimao Board.

11. EARLY TERMINATION OF THE SCHEME

The Scheme shall be early terminated if any of the following circumstances arise during the Validity Period, and the Options granted which exercisable but not yet exercised shall lapse and be cancelled:

• (1) Issue of Shanghai Shimao’s audited financial reports by its auditors for the most recent financial year with negative opinion or qualified opinion;

• (2) Shanghai Shimao has been imposed of administrative penalties by the CSRC due to material non-compliance of laws and regulations by Shanghai Shimao;

• (3) Other circumstances as determined by the CSRC.

12. AMENDMENTS TO THE SCHEME

• (1) The Shanghai Shimao Board is authorised to make adjustment to the number of Options and the exercise price of the Options in accordance with the adjustment mechanism set out in the Scheme, and shall announce and notify the Participants promptly.

• (2) Any proposed adjustment to the number of Options and the exercise price of the Options for circumstances beyond those set out in the Scheme or amendments to the Scheme shall be approved by the Shanghai Shimao Board, reviewed by the CSRC and approved by the Shareholders and the Shanghai Shimao Shareholders.

13. MISCELLANEOUS

• (1) The exercise price shall be paid by the Participants, and Shanghai Shimao shall not provide any form of financial assistance or provide any guarantee or undertakings to the Participants for the exercise of the Options.

• (2) The Options granted are not transferrable or used as a guarantee or for repayment of debts.

• (3) The A Shares acquired by any director or senior management of Shanghai Shimao pursuant to the exercise of the Options are not transferrable within half a year after he/she terminates his/ her employment with Shanghai Shimao.

• 19 -

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [162 x 65] intentionally omitted <==

SHIMAO PROPERTY HOLDINGS LIMITED 世茂房地產控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 813)

NOTICE OF THE EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “Meeting”) of Shimao Property Holdings Limited (the “Company”) will be held at Chief Executive Suite III, Level 5, Grand Hyatt Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on Monday, 17 June 2013 at 11:30 am (or immediately after the conclusion or, as the case maybe, adjournment of the annual general meeting of the Company scheduled at 11:00 am on the same day and at the same place as the Meeting as aforesaid, if later), or any adjournment thereof, for the purpose of considering and, if thought fit, passing (with or without amendments) the following ordinary resolution of the Company:

“THAT subject to and conditional upon (i) the completion of necessary filings relating to the Share Option Incentive Scheme (the “Scheme”) of Shanghai Shimao Co., Ltd. (“Shanghai Shimao”) made with the China Securities Regulatory Commission of the People’s Republic of China (“CSRC”) and CSRC having no objection to the Scheme and (ii) the approval of the shareholders of Shanghai Shimao the adoption of the Scheme, the terms of which have been tabled at the Meeting marked “A” and signed by the chairman of the Meeting for identification purpose, the adoption of the Scheme by Shanghai Shimao be and is hereby approved.”

For and on behalf of the Board Shimao Property Holdings Limited Hui Wing Mau Chairman

Hong Kong, 23 May 2013

Notes:

1. Any member entitled to attend and vote at the Meeting is entitled to appoint another person as his/her proxy to attend and vote instead of him/her. A member who is the holder of two or more shares may appoint more than one proxy to represent him/her and vote on his/her behalf at the Meeting of the Company. A proxy need not be a member of the Company. A proxy of a member who has appointed more than one proxy may only vote on a poll.

1. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his/her attorney duly authorised in writing or, if the appointer is a corporation, either under its common seal or under the hand of an officer, attorney or other person authorised to sign the same.

2. 20 -

NOTICE OF EXTRAORDINARY GENERAL MEETING

1. Where there are joint holders of any shares of the Company, any one of such joint holders may vote at the Meeting, either in person or by proxy, in respect of such shares as if he or she were solely entitled thereto; but if more than one of such joint holders be present at the Meeting the vote of senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

2. To be valid, the form of proxy together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy thereof, must be delivered to the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for holding the Meeting or any adjournment thereof. Completion and return of the form of proxy shall not preclude a member from attending and voting in person at the Meeting or at any adjournment thereof and, in such event, the instrument appointing a proxy shall be deemed to have been revoked.

3. 5 The register of members of the Company will be closed on Friday, 14 June 2013 and Monday, 17 June 2013, during which period no transfer of Shares will be effected. In order to qualify for the entitlement to attend and vote at the Meeting, all transfer documents, accompanied by the relevant share certificates, must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong no later than 4:30 p.m. on Thursday, 13 June 2013.

4. As at the date hereof, the Board comprises six executive directors, namely Mr. Hui Wing Mau (Chairman), Mr. Hui Sai Tan, Jason (Vice Chairman), Mr. Liu Sai Fei, Mr. Xu Younong, Ms. Tang Fei and Mr. Liao Lujiang; and three independent non-executive directors, namely Ms. Kan Lai Kuen, Alice, Mr. Lu Hong Bing and Mr. Lam Ching Kam.

5. 21 -