Sunac China Holdings Limited — Proxy Solicitation & Information Statement 2014

Feb 28, 2014

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 licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser for independent advice.

If you have sold or transferred all your shares in Sunac China Holdings Limited, you should at once hand this circular to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

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

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PROPOSED AMENDMENTS TO THE POST-IPO SHARE OPTION SCHEME AND THE TERMS OF OPTIONS GRANTED PURSUANT THERETO AND NOTICE OF EXTRAORDINARY GENERAL MEETING

A notice convening the extraordinary general meeting of Sunac China Holdings Limited to be held at Yuquanbaotu Hall, Xishanhui Business Club, 1 Dehui Road, Haidian District, Beijing, China on Monday, 17 March 2014 at 10:00 a.m. is set out on pages 9 to 12 of this circular. A form of proxy for use at the extraordinary general meeting is also enclosed. Such form of proxy is also published on the website of The Stock Exchange of Hong Kong Limited ( www.hkexnews.hk ). Whether or not you are able to attend the meeting, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the Company’s Hong Kong share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude shareholders from attending and voting at the meeting if they so wish.

28 February 2014

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9

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DEFINITIONS

In this circular, the following expressions shall have the meanings set out below unless the context requires otherwise:

• “Adoption Date”

• the date of adoption of the Post-IPO Share Option Scheme, being 29 April 2011

• “Articles of Association” the articles of association of the Company, as amended from time to time

• “Board” the board of Directors

• “Business Day”

• a day (other than a Saturday or Sunday or days on which a tropical cyclone warning number 8 or above or a “black” rain warning signal is hoisted in Hong Kong at any time between 9 a.m. and 5 p.m.) on which the Stock Exchange is open for trading and clearing banks in Hong Kong and the PRC are open for transactions of normal banking business

• “Company”

• Sunac China Holdings Limited, a company incorporated under the laws of the Cayman Islands with limited liability and whose shares are listed on the Stock Exchange (stock code: 1918)

• “connected persons” has the meaning ascribed to it under the Listing Rules

• “Directors”

• the directors of the Company

• “Extraordinary General Meeting”

• the extraordinary general meeting of the Company to be held at Yuquanbaotu Hall, Xishanhui Business Club, 1 Dehui Road, Haidian District, Beijing, China on Monday, 17 March 2014 at 10:00 a.m. or any adjournment thereof and notice of which is set out on pages 9 to 12 of this circular

• “Grant Period”

• any of the 1st Grant Period, the 2nd Grant Period and the 3rd Grant Period (as the case may be)

• “Group”

• the Company and its subsidiaries

• “Hong Kong”

• the Hong Kong Special Administrative Region of the PRC

• “HK$”

• Hong Kong dollars, the lawful currency of Hong Kong

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DEFINITIONS

• “Latest Practicable Date” 25 February 2014, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “Offer Date” in respect of an Option, the date specified in the letter pursuant to which the Company offers to grant Options to a Participant as being the offer date or if none, the date on which the Option is in fact offered to a Participant (or in each case, if that date is not a Business Day, the date which is the next following Business Day)

“Options” the share options granted under the Post-IPO Share Option Scheme

• “Post-IPO Share Option Scheme” the post-IPO share option scheme adopted by the Company on the Adoption Date and the details of which are disclosed in the Company’s circular dated 22 March 2011

• “PRC” the People’s Republic of China and for the purpose of this circular, excluding Hong Kong, the Macau Special Administrative Region and Taiwan

• “Shares” ordinary shares of HK$0.10 each in the share capital of the Company

• “Shareholders” the shareholders of the Company “Stock Exchange” The Stock Exchange of Hong Kong Limited “1st Grant Period” the year commencing from the Adoption Date “2nd Grant Period” the year commencing from the first anniversary of the Adoption Date

• “3rd Grant Period” the year commencing from the second anniversary of the Adoption Date

• “%” per cent.

* For identification purpose only

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LETTER FROM THE BOARD

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Executive Directors: Mr. SUN Hongbin Mr. WANG Mengde Mr. LI Shaozhong Mr. CHI Xun Mr. SHANG Yu Mr. JING Hong

Registered office: Landmark Square 3rd Floor 64 Earth Close P.O. Box 30592 Grand Cayman KY1-1203 Cayman Islands

Non-executive Directors: Ms. HU Xiaoling Mr. ZHU Jia

Independent Non-executive Directors: Mr. POON Chiu Kwok Mr. LI Qin Mr. MA Lishan Mr. TSE Chi Wai

Principal place of business in Hong Kong: 8th Floor, Gloucester Tower The Landmark 15 Queen’s Road Central Hong Kong

28 February 2014

To the Shareholders,

Dear Sir or Madam,

PROPOSED AMENDMENTS TO THE POST-IPO SHARE OPTION SCHEME AND THE TERMS OF OPTIONS GRANTED PURSUANT THERETO

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the announcement of the Company dated 17 February 2014 in relation to the proposed amendments to the Post-IPO Share Option Scheme and the terms of the Options granted pursuant thereto.

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LETTER FROM THE BOARD

The purpose of this circular is to (i) provide you with further information relating to the proposed amendments to the Post-IPO Share Option Scheme and the terms of the Options granted pursuant thereto; and (ii) give you notice of the Extraordinary General Meeting.

PROPOSED AMENDMENTS TO THE POST-IPO SHARE OPTION SCHEME AND THE TERMS OF OPTIONS GRANTED PURSUANT THERETO

The Post-IPO Share Option Scheme was approved and adopted by the Shareholders at the annual general meeting of the Company held on 29 April 2011. Under the existing terms of the Post-IPO Share Option Scheme and the terms of Options granted, the Options may be exercised at any time during the Option Period, i.e. in respect of an Option (to the extent vested and/or exercisable pursuant to the terms and conditions of the Post-IPO Share Option Scheme), a period commencing on the Offer Date and ending three years from the commencement of the relevant Grant Period during which that Option was granted.

As at the Latest Practicable Date, 99,900,000 Options, being the maximum number of Shares in respect of the Options that may be granted under the Post-IPO Share Option Scheme have been granted. Among which, 16,614,400 Options have been exercised, 852,200 Options have been lapsed and 82,433,400 Options remain outstanding. The Option Period of all outstanding Options was for a period commencing on the Offer Date and ending three years from the commencement of the relevant Grant Period during which that Option was granted.

In order to provide continuous incentives for grantees of the Post-IPO Share Option Scheme with regard to their contribution to the Company and to procure them to give continued support to the development of the Company, the Board proposed that:

• (i) the definition of “Option Period” in the Post-IPO Share Option Scheme be amended to “in respect of an Option (to the extent vested and/or exercisable pursuant to the terms and conditions of the Post-IPO Share Option Scheme), a period commencing on the Offer Date and ending six years from the commencement of the relevant Grant Period during which that Option was granted”; and

• (ii) the Option Period of the Options granted and outstanding at the date of the Extraordinary General Meeting be extended so that they shall expire at the end of six years from the commencement of the relevant Grant Period during which that Option was granted.”

Details of the above proposed amendments are provided in Resolution 1(A) in the notice convening the Extraordinary General Meeting as set out in page 9 of this circular.

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LETTER FROM THE BOARD

Assuming no further Options will be exercised between the Latest Practicable Date and the date of the Extraordinary General Meeting, the exercise period of the Options granted will be extended as follow:

				New exercise period
			Exercise	upon the
		Existing exercise	price of the	amendment of the	No. of
	Vesting date of the	period of the	Options	terms of the Options	outstanding
Date of grant	Options granted	Options granted	granted	granted	Options
30 September 2011	30 September 2011	30 September 2011 to	HK$1.484	30 September 2011 to	26,427,400
(granted during	(Note 1)	28 April 2014		28 April 2017	(Note 10)
the 1st Grant	29 April 2012	29 April 2012 to		29 April 2012 to
Period)	(Note 2)	28 April 2014		28 April 2017
	29 April 2013	29 April 2013 to		29 April 2013 to
	(Note 3)	28 April 2014		28 April 2017
21 May 2012	21 May 2012	21 May 2012 to	HK$2.33	21 May 2012 to
(granted during	(Note 4)	28 April 2015		28 April 2018	25,121,000
the 2nd Grant	29 April 2013	29 April 2013 to		29 April 2013 to	(Note 10)
Period)	(Note 5)	28 April 2015		28 April 2018
	29 April 2014	29 April 2014 to		29 April 2013 to
	(Note 6)	28 April 2015		28 April 2018
2 May 2013	2 May 2013	2 May 2013 to	HK$6.32	2 May 2013 to	30,885,000
(granted during	(Note 7)	28 April 2016		28 April 2019	(Note 10)
the 3rd Grant	29 April 2014	29 April 2014 to		29 April 2014 to
Period)	(Note 8)	28 April 2016		28 April 2019
	29 April 2015	29 April 2015 to		29 April 2015 to
	(Note 9)	28 April 2016		28 April 2019

Notes:

1. 30% of the Options granted during the 1st Grant Period were vested on the date of grant of such Options.

2. An additional 30% of the Options granted during the 1st Grant Period were vested upon the first anniversary date of the commencement date of the 1st Grant Period.

3. An additional 40% of the Options granted during the 1st Grant Period were vested upon the second anniversary date of the commencement date of the 1st Grant Period.

4. 30% of the Options granted during the 2nd Grant Period were vested on the date of grant of such Options.

5. An additional 30% of the Options granted during the 2nd Grant Period were vested upon the first anniversary date of the commencement date of the 2nd Grant Period.

6. An additional 40% of the Options granted during the 2nd Grant Period were vested upon the second anniversary date of the commencement date of the 2nd Grant Period.

7. 30% of the Options granted during the 3rd Grant Period were vested on the date of grant of such Options.

8. An additional 30% of the Options granted during the 3rd Grant Period were vested upon the first anniversary date of the commencement date of the 3rd Grant Period.

9. An additional 40% of the Options granted during the 3rd Grant Period were vested upon the second anniversary date of the commencement date of the 3rd Grant Period.

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LETTER FROM THE BOARD

1. As at the Latest Practicable Date, among the 82,433,400 outstanding Options, 24,350,000 Options were held by the executive Directors including Mr. Wang Mengde (5,200,000 Options), Mr. Li Shaozhong (4,800,000 Options), Mr. Chi Xun (4,900,000 Options), Mr. Shang Yu (4,800,000 Options) and Mr. Jing Hong(4,650,000 Options) and the remaining 58,083,400 Options were held by the employees of the Group.

The Company has considered other alternatives to incentivize the grantees of the Post-IPO Share Options including but not limited to the grant of share options under a new share options scheme. Given that the majority of the Options remained outstanding as at the Latest Practicable Date, the Board considered that the above proposed amendments would allow the grantees to continue to enjoy the benefit of the Post-IPO Share Option Scheme taking into account the contribution of these grantees to the growth and development of the Company and the fact that the labor market in the PRC has become increasingly competitive, therefore it is crucial for the Company to retain such talented employees so that they can continue to contribute to the success of the Company. As the above proposed amendments comply with the requirements under Rule 17.03(5) of the Listing Rules which states that the period within which the securities must be taken up under options granted must not be more than 10 years from the date of grant of the option, the Board consider that the above amendments are fair and reasonable, and they are in the interests of the Company and the Shareholders as a whole.

In addition, in order to update and bring the Post-IPO Share Option Scheme in line with the amendments to the Listing Rules in relation to the Inside Information Provisions (as defined in the Listing Rules), the Board has also resolved to propose certain amendments of the terms of the Post-IPO Share Option Scheme by replacing the references of “price sensitive information” with “Inside Information” therein. Details of the amendments are provided in Resolution 1(B) in the notice convening the Extraordinary General Meeting as set out on page 9 of this circular.

Furthermore, the Board has also resolved to propose amendments on clause 9.1 of the Post-IPO Share Option Scheme in order to correct inadvertent errors on the references of the clause numbers of the Post-IPO Share Option Scheme. Details of the amendments are provided in Resolution 1(C) in the notice convening the Extraordinary General Meeting as set out on page 10 of this circular.

Pursuant to note (2) to Rule 17.03 of the Listing Rules, any alterations to the terms and conditions of the Post-IPO Share Option Scheme which are of a material nature or any change to the terms of the Options granted must be approved by the Shareholders, unless where the alterations take effect automatically under the existing terms of the Post-IPO Share Option Scheme. As the proposed amendments to the Post-IPO Share Option Scheme will not take effect automatically under the existing terms of the Post-IPO Share Option Scheme and are considered to be material in nature, the proposed amendments to the terms of the Post-IPO Share Option Scheme and the terms of the Options granted pursuant thereto will be subject to approval by the Shareholders at the Extraordinary General Meeting.

Accordingly, resolutions will be proposed at the Extraordinary General Meeting as set out in Resolutions 1 and 2 in the notice convening the Extraordinary General Meeting to give effect to the proposals as described above.

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LETTER FROM THE BOARD

To the best of the knowledge of the Directors, none of the Shareholders are the grantees of the Post-IPO Share Option Scheme and therefore, none of the Shareholders are required to abstain from voting on the resolutions to be proposed at the Extraordinary General Meeting to approve the proposed amendments to the terms of the Post-IPO Share Option Scheme and the terms of the Options granted pursuant thereto.

EXTRAORDINARY GENERAL MEETING

A notice convening the Extraordinary General Meeting is set out on pages 9 to 12 of this circular at which resolutions will be proposed to approve the proposed amendments to the terms of the Post-IPO Share Option Scheme and the terms of the Options granted pursuant thereto.

A form of proxy is enclosed for use at the Extraordinary General Meeting. Such form of proxy is also published on the website of the Stock Exchange ( www.hkexnews.hk ). Whether or not you intend to be present at the Extraordinary General Meeting, you are requested to complete the form of proxy and return it to the Company in accordance with the instructions printed thereon not less than 48 hours before the time fixed for the holding of the Extraordinary General Meeting or any adjournment thereof. Completion and delivery of the form of proxy will not preclude Shareholders from attending and voting at the Extraordinary General Meeting if they so wish.

Pursuant to article 66 of the Articles of Association and Rule 13.39 of the Listing Rules, at any general meeting a resolution put to the vote of the meeting shall be decided by way of a poll.

On a poll, every Shareholder present in person or by proxy or, in the case of a Shareholder being a corporation, by its duly authorised representative shall have one vote for every fully paid Share of which he is the holder but so that no amount paid up or credited as paid up on a share in advance of calls or installments is treated for the foregoing purposes as paid up on a share. A Shareholder entitled to more than one vote needs not use all his votes or cast all the votes he uses in the same way.

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.

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LETTER FROM THE BOARD

RECOMMENDATION

The Directors (including the independent non-executive Directors) consider that the proposed amendments to the terms of the Post-IPO Share Option Scheme and the terms of the Options granted pursuant thereto are in the interest of the Company and the Shareholders as a whole and recommend the Shareholders to vote in favour of all resolutions to be proposed at the Extraordinary General Meeting.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of both the existing Post-IPO Share Option Scheme and the amended and restated Post-IPO Share Option Scheme reflecting the proposed amendments are available for inspection at the principal office of the Company in Hong Kong during normal business hours of any business day from the date of this circular up to and including the date of the Extraordinary General Meeting.

Yours faithfully, By order of the Board Sunac China Holdings Limited Sun Hongbin Chairman

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the extraordinary general meeting of Sunac China Holdings Limited (the “ Company ”) will be held at Yuquanbaotu Hall, Xishanhui Business Club, 1 Dehui Road, Haidian District, Beijing, China on Monday, 17 March 2014 at 10:00 a.m. for the purpose of considering and, if thought fit, passing (with or without amendments) the following ordinary resolutions:

1. THAT the Post-IPO Share Option Scheme (as defined in the circular of the Company dated 28 February 2014 (the “ Circular ”)) adopted by the Company on 29 April 2011 be amended in the following manner:

2. (A) By deleting the definition of “Option Period” in clause 2.1 of the Post-IPO Share Option Scheme in its entirety and substituting the following:

“ Option Period means in respect of an Option (to the extent vested and/or exercisable pursuant to the terms and conditions of this Scheme), a period commencing on the Offer Date and ending six years from the commencement date of the relevant Grant Period during which that Option was granted”

• (B) By deleting clause 5.8 of the Post-IPO Share Option Scheme in its entirety and substituting the following:

• “5.8 No grant of Options shall be made after Inside Information (as defined in the Listing Rules) has come to the knowledge of the Company until it has announced such Inside Information pursuant to the requirements of the Listing Rules and the Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). In particular, no Option shall be granted during the period of one month immediately preceding the earlier of:

  • (a) the date of the Board meeting as such date is first notified to the Stock Exchange in accordance with the Listing Rules for the approval of the Company’s results for any year, half-year or quarter or any other interim period (whether or not required under the Listing Rules); or

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (b) the deadline for the Company to publish an announcement of its results for any year or half-year under the Listing Rules or quarter or other interim period (whether or not required under the Listing Rules);

and ending the date of the results announcement. The period during which no Option may be granted will cover any period of delay in the publication of a results announcement.”

• (C) By deleting clause 9.1 of the Post-IPO Share Option Scheme in its entirety and substituting the following:

• “9.1 An Option shall lapse automatically (to the extent not already exercised) on the earliest of:

  • (a) the expiry of the Option Period;

  • (b) the expiry of the periods referred to in clause 8.7(a) to 8.7(c);

  • (c) the date of the commencement of the winding-up of the Company in respect of the situation contemplated by clause 8.7(d);

  • (d) the date the scheme or compromise referred to in clause 8.7(e) becomes effective;

  • (e) the date on which the Grantee (being an employee) ceases to be a Participant by reason of the termination of his employment on any one or more of the following grounds:

    • (i) that he has been guilty of misconduct;

    • (ii) that he has committed an act of bankruptcy or has become insolvent or has made an arrangement or composition with creditors generally;

    • (iii) that he has been convicted of a criminal offence involving his integrity or honesty; or

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (iv) on any other ground on which an employer would be entitled to immediately terminate his employment pursuant to applicable laws or under the Grantee’s employment contract;

and a resolution of the Board (or the board of directors of the relevant Subsidiary or Invested Entity) to the effect that the employment of a Grantee has or has not been terminated on one or more of the grounds specified in this clause 9.1(e) shall be conclusive;

• (f) the date on which the Grantee commits a breach of clause 8.4;

• (g) if an Option was granted subject to certain conditions, restrictions or limitation, the date on which the Board resolves that the Grantee has failed to satisfy or comply with such conditions, restrictions or limitation;

• (h) the occurrence of such event or expiry of such period as may have been specifically provided for in the Offer Letter.”

• THAT the Option Period (as defined in the Circular) of the Options (as defined in the Circular) granted and outstanding as at the date of this resolution be extended to a period commencing on the Offer Date (as defined in the Circular) and ending six years from the commencement date of the relevant Grant Period (as defined in the Circular) during which that Option was granted.

By order of the Board Sunac China Holdings Limited SUN Hongbin Chairman

Hong Kong, 28 February 2014

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Registered office: Head office: Landmark Square 10F, Building C7 3rd Floor Magnetic Plaza 64 Earth Close Binshuixi Road P.O. Box 30592 Nankai District Grand Cayman KY1-1203 Tianjin 300381 Cayman Islands PRC

Principal place of business in Hong Kong: 8th Floor, Gloucester Tower The Landmark 15 Queen’s Road Central Hong Kong

Notes:

• (i) A shareholder entitled to attend and vote at the above meeting is entitled to appoint another person as his/her proxy to attend and vote instead of him/her. A proxy need not be a shareholder of the Company.

• (ii) In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the vote(s) of the other joint holder(s) and for this purpose, seniority shall be determined as that one of the persons so present whose name stands first on the register of shareholders in respect of such share shall alone be entitled to vote in respect thereof.

• (iii) In order to be valid, a form of proxy must be deposited at the Hong Kong share registrar of the Company, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong together with the power of attorney or other authority (if any) under which it is signed (or a notarially certified copy thereof) not less than 48 hours before the time appointed for the holding of the above meeting or any adjournment thereof. The completion and return of the form of proxy shall not preclude shareholders of the Company from attending and voting in person at the above meeting (or any adjourned meeting thereof) if they so wish.

• (iv) The transfer books and register of shareholders will be closed from Friday, 14 March 2014 to Monday, 17 March 2014, both days inclusive, in order to determine the entitlement of shareholders to attend the above meeting, during which period no share transfers can be registered. All transfers accompanied by the relevant share certificates must be lodged with the Hong Kong share registrar of the Company, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 4:30 p.m. on Thursday, 13 March 2014.

• (v) As at the date of this notice, the executive Directors are Mr. Sun Hongbin, Mr. Wang Mengde, Mr. Li Shaozhong, Mr. Chi Xun, Mr. Shang Yu and Mr. Jing Hong; the non-executive Directors are Ms. Hu Xiaoling and Mr. Zhu Jia, and the independent non-executive Directors are Mr. Poon Chiu Kwok, Mr. Li Qin, Mr. Ma Lishan and Mr. Tse Chi Wai.

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