Walnut Capital Limited — Proxy Solicitation & Information Statement 2002

May 30, 2002

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about this circular or as to the action to be taken, you should consult a stockbroker, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Haywood Investments Limited (“Company”), you should at once hand this circular with the enclosed form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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（希域投資有限公司）

(Incorporated in the Cayman Islands with limited liability)

PROPOSAL FOR

ADOPTION OF SHARE OPTION SCHEME

A notice convening the EXTRAORDINARY GENERAL MEETING of the Company to be held at 16th Floor, Wah Kit Commercial Centre, 302 Des Voeux Road Central, Hong Kong on Thursday, 23rd May, 2002 at 9:50 a.m. (or so soon thereafter as the extraordinary general meeting of the Company convened at the same place and date at 9:40 a.m. shall be concluded or adjourned) is appended to this circular. 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 deposit the same with the Company’s principal place of business in Hong Kong at 16th Floor, Wah Kit Commercial Centre, 302 Des Voeux Road Central, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the meeting. Completion and return of the form of proxy will not prevent shareholders from attending and voting at the meeting if they so wish.

30th April, 2002

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
The Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
1. Purposes of the Share option Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
2. Value of the options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
3. Adoption of the Share Option Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
4. Conditions of the Share Option Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
The EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Further Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Appendix I – General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Appendix II – Principal Terms of the Share Option Scheme . . . . . . . . . . . . . . . . . . . . .	8
Notice of EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17

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DEFINITIONS

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

“%”	per cent.
“associate(s)”	has the meaning ascribed to it under the Listing Rules
“Auditors”	the auditors for the time being of the Company
“Board”	the board of directors of the Company
“Company”	Haywood Investments Limited, a company incorporated
	in the Cayman Islands with limited liability, the securities
	of which are listed on the Stock Exchange
“Date of Grant”	the date on which the Directors resolves to make an offer
	to grant an option under the Share Option Scheme to an
	Participant
“Director(s)”	director(s) of the Company
“EGM”	the extraordinary general meeting of the Company to be
	held on Thursday, 23rd May, 2002 at 9:50 a.m., the
	notice of which is appended to this circular, or any
	adjournment thereof
“Grantee”	any Participant who accepts an offer of the grant an
	option in accordance with the terms of the Share Option
	Scheme, or any person who is entitled to any such option
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	The Hong Kong Special Administrative Region of the
	People’s Republic of China
“Latest Practicable Date”	25th April, 2002, being the latest practicable date prior
	to the printing of this circular for ascertaining certain
	information referred to in this circular

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DEFINITIONS

“Listing Rules”

• “Participant”

the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

any person who satisfies the eligibility requirements in the Share Option Scheme, namely:

• (a) any full-time employee, director (including any non-executive director or independent non-executive director) and part time employee with weekly working hours of 15 hours and above of the Company or of any of its subsidiaries;

• (b) any advisor or consultant (in the areas of financial or corporate managerial) to the Company or to any of its Subsidiaries; and

• (c) any adviser, consultant, agent, business affiliates or any person or entity who provides research or other support directly or indirectly to the Group, and any employee, adviser or consultant to the investment management company for the Company, who, at the sole determination of the board of Directors, has contributed to the Company (the assessment criteria of which are (i) such person’s contribution to the development and performance of the Company; (ii) the quality of work performed by such person for the Company directly or indirectly; (iii) the initiative and commitment of such person in performing his or her duties; and (iv) the length of service or contribution of such person to the Company)

• “Share Option Scheme”

• “Share(s)”

• “Shareholders(s)”

the share option scheme proposed to be adopted by the Company, a summary of the principal terms of which is set out in Appendix II

the ordinary share(s) in the capital of the Company with a par value of HK$0.01 each (or such other prevailing par value from time to time)

shareholder(s) of the Company

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DEFINITIONS

“Stock Exchange” The Stock Exchange of Hong Kong Limited “Takeover Code” the Hong Kong Code on Takeovers and Mergers “trading day” means a day on which the Stock Exchange is open for the trading of securities

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LETTER FROM THE BOARD

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（希域投資有限公司）

(Incorporated in the Cayman Islands with limited liability)

Directors:

WONG Fong Kim (Chairman) CHOW Pok Yu, Augustine LEE Wa Lun, Warren TAI Ah Lam, Michael CHANG Hang Vai HUI Hung, Stephen WONG Yun Kuen, Edward HSIEH Dominick*

Registered office: Ugland House P.O. Box 309 George Town Grand Cayman Cayman Islands

• independent non-executive Directors

Principal Place of Business in Hong Kong: 16th Floor Wah Kit Commercial Centre 302 Des Voeux Road Central Hong Kong

30th April, 2002

To the Shareholders

Dear Sir or Madam,

PROPOSAL FOR ADOPTION OF SHARE OPTION SCHEME

THE PROPOSAL

The purpose of this circular is to provide you with information regarding the Company’s proposal to adopt the Share Option Scheme and to give you notice of the EGM at which an ordinary resolution will be proposed to consider and, if thought fit, approve the adoption of the Share Option Scheme and the grant of general authority to the Directors to grant options under the Share Option Scheme for the subscription of Shares representing up to 10% of the issued share capital of the Company as at the date of the EGM.

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LETTER FROM THE BOARD

Purposes of the Share Option Scheme

The Company does not have any existing share option scheme. The Directors consider that it would be advantageous to the Group’s development for the Company to adopt the Share Option Scheme. The Share Option Scheme, by granting options to the employees or other Participants, will provide to the Participants a personal stake in the Company, which the Directors believe, will help the building of common objectives of the Group and the Participants for the betterment of business and profitability of the Group. The Directors consider that the adoption of the Share Option Scheme is in the interests of the Company and the Shareholders as a whole because it enables the Company to reward and provide incentives to its employees and other Participants who contributed or may contribute to the growth and development of the Group.

Value of the options

The Directors consider it inappropriate to value the options that can be granted under the Share Option Scheme on the assumption that they had been granted at the Latest Practicable Date, as various determinating factors for the calculation of such value cannot be reasonably fixed at this stage. It would not be meaningful and to certain extent would be misleading to the Shareholders if the value of the options is calculated based on a set of speculated assumptions. However, the information on value of the option granted in any financial period will be provided to the Shareholders based on Black-Scholes option pricing model, the binomial model or a comparable generally accepted methodology as at the end of the relevant financial period for any interim or final results of the Company.

Adoption of the Share Option Scheme

At the EGM, an ordinary resolution will be proposed for the adoption of the Share Option Scheme by the Company and for the grant of general authority to the Directors to grant options under the Share Option Scheme for the subscription of Shares representing up to 10% of the issued share capital of the Company as at the date of the EGM.

Conditions of the Share Option Scheme

The adoption of the Share Option Scheme is conditional upon:

1. the approval by the Shareholders; and

2. the Stock Exchange granting approval to the listing of and permission to deal in the Shares to be issued pursuant to the exercise of any option granted under the Share Option Scheme.

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LETTER FROM THE BOARD

THE EGM

A notice convening the EGM to be held on Thursday, 23rd May, 2002 at 9:50 a.m. at 16th Floor, Wah Kit Commercial Centre, 302 Des Voeux Road Central, Hong Kong is appended to this circular. A form of proxy for use at the EGM is also enclosed. The form of proxy, in order to be valid, must be deposited in accordance with the instructions printed thereon not less than 48 hours before the time for holding the meeting. Completion and delivery of the form of proxy will not prevent the Shareholders from attending and voting in the EGM if they wish.

RECOMMENDATION

The Directors consider that the adoption of Share Option Scheme is in the interests of the Company and the Shareholders as a whole.

Accordingly, the Directors recommend that the Shareholders vote in favour of the ordinary resolution for approving (a) the adoption of the Share Option Scheme, and (b) the grant of general authority to the Directors to grant options under the Share Option Scheme and to allot, issue and deal with Shares pursuant to the exercise of options granted under the Share Option Scheme.

FURTHER INFORMATION

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

Yours faithfully, For and on behalf of the Board

Haywood Investments Limited Wong Fong Kim

Chairman

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GENERAL INFORMATION

APPENDIX I

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors 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 in this circular misleading.

2. INTERESTS OF DIRECTORS

As at the Latest Practicable Date, none of the Directors act as trustees of the existing share option scheme or have any direct or indirect interest in the trustees (if any) of the existing share option scheme.

3. GENERAL

Copies of the following documents will be available for inspection at the Company’s principal place of business in Hong Kong at 16th Floor, Wah Kit Commercial Centre, 302 Des Voeux Road Central, Hong Kong during normal business hours on any business day up to and including Thursday, 23rd May, 2002 and at the EGM:

• (i) the memorandum of association and articles of association of the Company; and

• (ii) the Share Option Scheme.

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APPENDIX II PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

This Appendix summaries the principal terms of the Share Option Scheme but does not form part of, nor is it intended to be, part of the Share Option Scheme nor should it be taken as affecting the interpretation of the rules of the Share Option Scheme. The Directors reserve the right at any time prior to the EGM to make such amendments to the Share Option Scheme as they may consider necessary or appropriate provided that such amendments do not conflict in any material aspects with the summary in this Appendix.

The following is a summary of the principal terms of the Share Option Scheme which is proposed to be adopted by the Company as a share incentive scheme for the Company at the EGM:

(a) Purpose of the Scheme

The purpose of this Scheme is to provide Participants with the opportunity to acquire proprietary interests in the Company and to encourage Participants to work towards enhancing the value of the Company and its Shares for the benefit of the Company and its Shareholders as a whole.

(b) Administration of the Share Option Scheme

The Share Option Scheme shall be subject to the administration of the Board, and the decision of the Board shall be final and binding on all parties. The Board shall have the right to (i) interpret and construe the provisions of the Scheme, (ii) determine the persons who will be offered options under the Share Option Scheme, and the number of Shares and subscription price of the options, (iii) to make such appropriate and equitable adjustments to the terms of options granted under the Share Option Scheme as it deems necessary, and (iv) make such other decisions or determinations as it shall deem appropriate in relation to the grant of options and/or the administration of the Share Option Scheme. The interpretation of the Share Option Scheme by the Board must be in accordance with Chapter 17 of the Listing Rules and any amendments to or alteration of the Share Option Scheme referred to in paragraph (w) below must comply with the requirements referred to in paragraph (w) below.

(c) Who may join

The Board may at any time within ten years after the adoption date of the Share Option Scheme make an offer to any Participant, as the Board may in its absolute discretion select, to take up an option pursuant to which such Participant may, during the period of the option, subscribe for such number of Shares as the Board may determine at a subscription price determined in accordance with (d) below. A Date of Grant of option shall be a business day.

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APPENDIX II PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

(d) Price of Shares

The subscription price shall be such price determined by the Board at its absolute discretion and notified to the Participant in the offer but shall be no less than the highest of:

• (i) the closing price of the Shares as stated in the daily quotations sheets issued by the Stock Exchange on the Date of Grant;

• (ii) the average closing price of the Shares as stated in the daily quotations sheets issued by the Stock Exchange for the 5 business days immediately preceding the Date of Grant; and

(iii) the nominal value of a Share on the Date of Grant.

(e) Maximum number of Shares

• (i) The overall limit on the number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Share Option Scheme and other share option schemes of the Company must not exceed 30% of the Shares in issue from time to time (“Scheme Limit”).

• (ii) The Shares which may be issued upon exercise of all options to be granted under the Share Option Scheme and other share option schemes of the Company shall not exceed 10% of the Shares in issue upon adoption of the Share Option Scheme (the “Scheme Mandate Limit”). Options lapsed in accordance with the terms of the Share Option Scheme shall not be counted for the purpose of calculating the Scheme Mandate Limit.

• (iii) The Company may renew the Scheme Mandate Limit at any time subject to prior shareholders’ approval. However, the Scheme Mandate Limit as renewed shall not exceed 10% of the Shares in issue as at the date of the aforesaid shareholders’ approval. Options previously granted under the Share Option Scheme, and other share option schemes (including those outstanding, lapsed in accordance with the schemes or exercised options) shall not be counted for the purpose of calculating the limit as renewed. A circular must be sent to shareholders in connection with the meeting at which their approval will be sought.

• (iv) The Company may also seek separate shareholders’ approval for granting options beyond the Scheme Mandate Limit to Participants specifically identified by the Company before the aforesaid shareholders’ meeting where such approval is sought. A circular must be sent to shareholders containing a generic description of the identified Participants, the number and terms of the options to be granted, the purpose of granting options to the identified Participants, and how these options serve such purpose.

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APPENDIX II PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

• (v) The total number of Shares issued and to be issued upon exercise of the options granted and to be granted to each Participant or Grantee (as the case may be) (including both exercised and outstanding options) in any 12-month period must not exceed 1% of the Shares in issue (the “Individual Limit”). Any further grant of options in excess of the Individual Limit shall be subject to shareholders’ approval with such Participant or Grantee (as the case may be) and his associates (as such term is defined in the Listing Rules) abstaining from voting. A circular must be sent to the shareholders disclosing the identity of the Participant or Grantee (as the case may be) and the number and terms of the options granted and to be granted. The number and terms of options to be granted to such Participants or Grantee, as the case may be, shall be fixed before shareholders’ approval is sought and the date of the board meeting for proposing such further grant shall be taken as the Date of Grant of an option for the purpose of calculating the subscription price.

(f) Grant of options to connected persons

The grant of options to any director, chief executive or substantial shareholder of the Company of their respective associates shall be approved by the independent non-executive directors of the Company (excluding any independent non-executive director who is the proposed Grantee of the option). Where any grant of options to a director and chief executive, substantial shareholder (as that term is defined in the Listing Rules) or an independent nonexecutive director of the Company, or any of their respective associates, would result in the Shares issued and to be issued upon exercise of all options already granted and to be granted (including options exercised, cancelled and outstanding) to such person in the 12-month period up to and including the date of such grant:

• (i) representing in aggregate over 0.1% of the Shares in issue for the time being; and

• (ii) having an aggregate value, based on the closing price of the Shares as stated in the daily quotations sheets issued by the Stock Exchange on the Date of Grant, in excess of HK$5 million,

such grant of options shall be approved by the Shareholders (voting by way of poll). All connected persons (as defined in the Listing Rules) of the Company shall abstain from voting at such general meeting, except that any connected person may vote against the relevant resolution at the general meeting provided that his intention to do so has been stated in the circular to be sent to the Shareholders in connection therewith.

(g) Time of exercise of option

An option may be exercised in accordance with the terms of the Share Option Scheme at any time during a period to be notified by the Board to each Grantee but may not be exercised after the expiry of ten years from the Date of Grant. The Board may provide restrictions on the exercise of an option during the period an option may be exercised.

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APPENDIX II PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

(h) Rights personal to Grantee

An option shall be personal to the Grantee and shall not be assignable and no Grantee shall in any way sell, transfer, charge, mortgage, encumber or create any interest in favour of any other person over or in relation to any option.

(i) Rights on cessation of employment by death

If the Grantee who is an employee or executive director (but not a non-executive director) of the Group, dies before exercising the option in full and none of the events which would be a ground for termination of his or her employment under (k) below then exists, the personal representative(s) of the Grantee shall be entitled within a period of 12 months from the date of death to exercise the option up to the entitlement of such Grantee as at the date of death, failing which the option will lapse.

(j) Rights on cessation of employment for other reasons

If the Grantee who is an employee or director, ceases to be an employee or executive director (but not a non-executive director) of the Group for any reason other than on his or her death or the termination of his/her employment or directorship on one or more of the grounds specified in (k) below, the option shall lapse on the date of cessation of such employment or directorship and not be exercisable unless the Board otherwise determines in which event the option shall be exercisable to the extent and within such period as the Board may determine. The date of cessation of employment or directorship shall be the last actual working day on which the Grantee was physically at work with the Company or the relevant Subsidiary, whether salary is paid in lieu of notice or not.

(k) Rights on cessation of employment by dismissal

If a Grantee who is an employee or executive director (but not a non-executive director), ceases to be an employee or executive director (but not a non-executive director) of the Group by reason of the termination of his or her employment or directorship on the grounds that he or she has been guilty of serious misconduct, or appears either to be unable to pay or to have no reasonable prospect of being able to pay his or her debts or has become bankrupt or has made any arrangement or composition with his or her creditors generally, or has been convicted of any criminal offence involving his or her integrity or honesty or on any other ground on which an employer would be entitled to terminate his or her employment summarily, his or her option will lapse and not be exercisable on the date of termination of his or her employment or directorship.

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APPENDIX II PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

(l) Cancellation of options

Any cancellation of option granted but not exercised may be cancelled if the Grantee so agrees. If such cancellation has been approved by the Shareholders in a general meeting, options may be re-issued after such cancellation, provided that there are available unissued options within the limits mentioned in paragraph (e) above and the re-issued options shall only be granted in compliance with the terms of the Share Option Scheme. The relevant Grantees and their respective associates shall abstain from voting at any such Shareholders’ meeting to approve the cancellation and any vote taken at the general meeting for approving such cancellation shall be taken by poll. If cancellation takes place without Shareholders’ approval, such options may not be re-issued.

(m) Effects of alterations to share capital

• (i) In the event of any alteration in the capital structure of the Company whilst any option remains exercisable or the Share Option Scheme remains in effect, and such event arises from a capitalization of profits or reserves, rights issue, consolidation, sub-division or reduction of the share capital of the Company, then, in any such case the Company shall instruct the Auditors or independent financial adviser to the Company to certify in writing the adjustment, if any, that ought in their opinion fairly and reasonably to be made either generally or as regards any particular Grantee, to:

• (aa) the number or nominal amount of Shares subject to option(s) already granted and to the Share Option Scheme (insofar as it is/they are unexercised); and/or

• (bb) the subscription price of any option(s),

and an adjustment as so certified by the Auditors or the independent financial adviser to the Company shall be made, provided that:

• (cc) the Auditor or financial adviser shall confirm to the Directors in writing that the adjustment (other than any made on a capitalisation issue) satisfy the requirements set out in the note to Rule 17.03(13) of the Listing Rules;

• (dd) no such adjustment shall be made the effect of which would be to enable a Share to be issued at less than its nominal value;

• (ee) such adjustment must give a Participant the same proportion of the equity capital of the Company as that to which that person was previously entitled; and

• (ff) the issue of securities of the Company as consideration in a transaction shall not be regarded as a circumstance requiring any such adjustment.

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APPENDIX II PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

• (ii) If there has been any alteration in the capital structure of the Company as referred to in paragraph (i) above, the Company shall, upon receipt of a notice from a Grantee, inform the Grantee of such alteration and shall either inform the Grantee of the adjustment to be made in accordance with the certificate of the Auditors or the independent financial adviser to the Company obtained by the Company for such purpose or, if no such certificate has yet been obtained, inform the Grantee of such fact and instruct the Auditors or the independent financial adviser to the Company as soon as practicable thereafter to issue a certificate in that regard in accordance with paragraph (i) above.

(n) Rights on a general offer

In the event of a general offer by way of takeover (other than by way of scheme of arrangement) being made to all the holders of Shares (or all such holders other than the offeror, any person controlled by the offeror and any person acting in association or concert with the offeror) and such offer becomes or is declared unconditional prior to the expiry date of the relevant option, the Company shall forthwith give notice thereof to the Grantee and the Grantee shall be entitled to exercise the option either to its full extent or to the extent notified by the Company at any time within such period as shall be notified by the Company.

In the event of a general offer by way of scheme of arrangement being made to all the Shareholders and has been approved by the necessary number of Shareholders at the requisite meetings, the Grantee may at any time thereafter (but before such time as shall be notified by the Company) exercise the option either to its full extent or to the extent notified by the Company.

(o) Rights on voluntary winding-up

In the event a notice is given by the Company to its shareholders to convene a Shareholders’ meeting for the purpose of considering and, if thought fit, approving a resolution to voluntarily wind up the Company, the Grantee may at any time thereafter (but before such time as shall be notified by the Company) exercise the option either to its full extent or to the extent notified by the Company, and the Company shall as soon as possible and in any event no later than three days prior to the date of the proposed Shareholders’ meeting, allot, issue and register in the name of the Grantee such number of fully paid Shares which fall to be issued on exercise of such option.

(p) Rights on compromise or arrangement

In the event of a compromise or arrangement, other than a scheme of arrangement in connection with a general offer mentioned in paragraph (n) above, between the Company and its members or creditors being proposed in connection with a scheme for the reconstruction or

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APPENDIX II PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

amalgamation of the Company, the Company shall first give notice to all Grantees on the same day as it gives notice of the meeting to its members or creditors to consider such a scheme or arrangement and the Grantee may at any time thereafter but before such time as shall be notified by the Company exercise the option either to its full extent or to the extent notified by the Company, and the Company shall as soon as possible and in any event no later than three days prior to the date of the proposed meeting, allot, issue and register in the name of the Grantee such number of fully paid Shares which fall to be issued on exercise of such option.

(q) Ranking of Shares

The Shares to be allotted and issued upon the exercise of an option will rank pari passu with the fully paid Shares in issue on the date the name of the Grantee is registered on the register of members of the Company. Prior to the Grantee being registered on the register of members of the Company the Grantee shall not have any voting rights, or rights to participate in any dividends or distributions of any rights arising on a liquidation of the Company, in respect of the Shares to be issued upon the exercise of the option.

The Shares issued on exercise of the options will on issue be identical to the then existing issued Shares of the Company.

(r) Amount payable on acceptance

The amount payable on acceptance of an option is HK$1.00. The offer of the option shall be accepted by the Participants within 7 days from the date of the offer, otherwise the offer shall lapse.

(s) Minimum period or performance target

Subject to any terms specifically imposed by the Board, there is no minimum period for which an option must be held before it can be exercised and no performance target which must be achieved before the options can be exercised.

(t) Period of the Share Option Scheme

Subject to earlier termination by the Company in general meeting or by the Board, the Share Option Scheme shall be valid and effective for a period of ten years from the date of its adoption, being the date on which the Share Option Scheme becomes unconditional and effective. After the expiry of the ten-year period, no further options will be offered or granted but in all other respects the provisions of the Share Option Scheme shall remain in force and effect in respect of options granted under the Share Option Scheme but not yet exercised at the time of its termination. Options complying with the provisions of Chapter 17 of the Listing Rules which are granted during the life of the Share Option Scheme and which remain unexpired immediately prior to the end of the ten-year period shall continue to be exercisable thereafter.

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APPENDIX II PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

(u) Termination of the Share Option Scheme

The Company by ordinary resolution in general meeting or the Board may at any time terminate the operation of the Share Option Scheme and in such event no further options will be offered or granted but in all other respects the provisions of the Share Option Scheme shall remain in full force and effect in respect of options granted under the Share Option Scheme but not yet exercised at the time of its termination. Options complying with the provisions of Chapter 17 of the Listing Rules which are granted during the life of the Share Option Scheme and which remain unexpired immediately prior to the termination of the operation of the Share Option Scheme shall continue to be exercisable thereafter.

(v) Lapse of option

An option shall lapse automatically and not be exercisable, to the extent not already exercised, on the earliest of:

• (i) the expiry of the option period;

• (ii) the expiry of the periods referred to in paragraph (i), (j) or (o) respectively;

• (iii) subject to any court of competent jurisdiction not making an order the effect of which is to prohibit the offeror from acquiring the remaining shares in the general offer, the expiry of the period referred to in paragraph (n) above;

• (iv) subject to the scheme of arrangement referred to in paragraph (n) or paragraph (p) above becoming effective, the expiry of the period for exercising an option relating thereto;

• (v) the date on which the Grantee who is an employee (including an executive director but excluding a non-executive director) ceases to be an employee or director by reason of the termination of his or her employment or directorship on grounds including, but not limited to, misconduct, bankruptcy, insolvency and conviction of any criminal offence;

• (vi) the date of the commencement of the winding-up of the Company; or

• (vii) the date on which the Grantee sells, transfers, charges, mortgages, encumbers or creates any interest in favour of any third party over or in relation to the option in breach of the Share Option Scheme.

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APPENDIX II PRINCIPAL TERMS OF THE SHARE OPTION SCHEME

(w) Alterations to the Share Option Scheme

The alteration of the Share Option Scheme are governed by Chapter 17 of the Listing Rules and cannot be altered to the advantage of Grantees or prospective Grantees of options except with the prior sanction of an ordinary resolution of the Company in general meeting with Participants and their associates abstaining from voting and the approval of the Stock Exchange. Furthermore, the provisions in the Share Option Scheme relating to the matters set out in Rule 17.03 of the Listing Rules must not be altered except with the prior approval of the Shareholders in general meeting. Any alteration to the terms and conditions of the Share Option Scheme which are of a material nature or any change in the terms of options granted or any change to the authority of the Board must be approved by the Shareholders, except where the alterations take effect automatically under the existing terms of the Share Option Scheme. Any amended terms of the Share Option Scheme or the options under such scheme must still comply with the relevant requirements of Chapter 17 of the Listing Rules.

The Present Status of the Share Option Scheme

The Share Option Scheme is conditional on the Listing Committee granting approval to the listing of, and permission to deal in, the Shares which may be issued pursuant to the exercise of any options granted under the Share Option Scheme.

Application will be made to the Listing Committee for the approval to the listing of, and permission to deal in, the Shares which may fall to be issued pursuant to the exercise of the options granted under the Share Option Scheme.

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NOTICE OF EGM

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（希域投資有限公司）

(Incorporated in the Cayman Islands with limited liability)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Haywood Investments Limited (the “ Company ”) will be held at 16th Floor, Wah Kit Commercial Centre, 302 Des Voeux Road Central, Hong Kong on Thursday, 23rd May, 2002 at 9:50 a.m. (or so soon thereafter as the extraordinary general meeting of the Company convened at the same place and date at 9:40 a.m. shall be concluded or adjourned) for the purpose of considering and, if thought fit, passing, with or without modification, the following resolution:

ORDINARY RESOLUTION

“ THAT :

• (a) subject to the grant by The Stock Exchange of Hong Kong Limited of the listing of and permission to deal in the shares (“ Shares ”) in the capital of the Company with a par value of HK$0.01 each to be issued and allotted by the Company under the proposed share option scheme of the Company (the “ Scheme ”), the rules of which are set out in a document submitted to the meeting marked “A” and signed for the purpose of identification by the Chairman, such Scheme be and is hereby approved and adopted as the Company’s share option scheme and the directors of the Company (“ Directors ”) be and are hereby authorised to take all such steps as they may deem necessary, desirable or expedient to carry into effect, waive or amend the Scheme subject to the terms of the Scheme and Chapter 17 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (as amended from time to time); and

• (b) the Directors be and are hereby authorised to grant options to subscribe for Shares in accordance with the rules of the Scheme up to a maximum of 10% of the Shares in issue as at the date of passing of this resolution, to issue and allot Shares pursuant to

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NOTICE OF EGM

the exercise of the options so granted, to administer the Scheme in accordance with its terms and to take all necessary actions incidental thereto as the Directors deem fit.”

By Order of the Board of Haywood Investments Limited Wong Fong Kim Chairman

Hong Kong, 30th April, 2002

Principal place of business:

16th Floor Wah Kit Commercial Centre 302 Des Voeux Road Central Hong Kong

Notes:

• (i) A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy need not be a member of the Company. A form of proxy for use at the meeting is enclosed herewith. In the case of a joint holding, the form of proxy may be signed by any joint holder, but if more than one joint holder is present at the meeting, whether in person or by proxy, that one of the joint holders whose name stands first on the register of members in respect of the relevant joint holding shall alone be entitled to vote in respect thereof.

• (ii) To be valid, the form of proxy together with any power of attorney or other authority under which it is signed or a notarially certified copy of that power of attorney or authority must be deposited with the Company’s principal place of business in Hong Kong at 16th Floor, Wah Kit Commercial Centre, 302 Des Voeux Road Central, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

• (iii) Completion and return of the accompanying form of proxy will not preclude members of the Company from attending and voting in person at the meeting or any adjournment thereof should they so wish.

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