China NT Pharma : PROPOSAL FOR ADOPTION OF NEW SHARE OPTION SCHEME AND NOTICE OF EXTRAORDINARY GENERAL MEETING

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.

中 國 泰 凌 醫 藥 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

A notice convening the extraordinary general meeting ("EGM") of the Company to be held at Regus
Business Centre, 35/F, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong on Monday, 22 September
2014 at 10:00 a.m. is set out on pages 17 to 18 of this circular. A form of proxy for use by the Shareholders at the EGM is enclosed herein. 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 EGM, you are requested to complete the accompanying form of proxy for use at the EGM in accordance with the instructions printed thereon and return the same to the Company's share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen's Road East, Hong Kong, as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjourned meeting thereof should you so wish.
4 September 2014

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

"Adoption Date" the date on which the New Share Option Scheme is adopted, conditionally or unconditionally, by the resolution of the Shareholders at the EGM
"associate(s)" has the meaning ascribed thereto in the Listing Rules
"Board" the board of directors of the Company (and, in relation to the New Share Option Scheme, includes any committee or delegate of the Board appointed by the Board to perform any of its function)
"Business Day" any day on which the Stock Exchange is open for business of dealing in securities
"close associate(s)" has the meaning ascribed thereto in the Listing Rules
"Companies Ordinance" the Companies Ordinance (Chapter 622 of the Laws of Hong
Kong)
"Company" China NT Pharma Group Company Limited 中國泰凌醫藥集團 有限公司, an exempted company incorporated in the Cayman
Islands with limited liability on 1 March 2010 and the issued securities of which are listed on the Stock Exchange
"connected person(s)" has the meaning ascribed thereto in the Listing Rules
"Contract" in relation to an employee or a Director, his/her contract of employment or service contract or terms of employment with his/ her Employer (as amended from time to time), whether or not such contract is written or oral and comprised in one or more documents
"core connected person(s)" has the meaning ascribed thereto in the Listing Rules
"Director(s)" the director(s) of the Company, and in relation to the New Share Option Scheme, the directors of any Eligible Entity, including executive and non-executive director(s)
"EGM" the extraordinary general meeting of the Company to be held on
22 September 2014 for the purpose of considering and, if thought fit, approving, among other things, the New Share Option Scheme or any adjournment thereof
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"Eligible Entity" the Company, any of its subsidiaries (as defined in the Companies Ordinance), and any entity (including associated company) in which the Company, any of its subsidiaries holds any equity interest
"Employer" in relation to a Participant, the Eligible Entity which employs or has appointed him/her under his/her Contract
"Group" the Company and its subsidiaries
"Hong Kong" the Hong Kong Special Administrative Region of the PRC "Independent Non-Executive in relation to any company, a person who from time to time is an
Director" independent non-executive director of that company within the meaning of the Listing Rules
"Latest Practicable Date" 1 September 2014, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular
"Listing Rules" the Rules Governing the Listing of Securities on the Stock
Exchange
"New Share Option Scheme" the share option scheme proposed to be adopted by the Shareholders at the EGM, a summary of its principal terms is set out in Appendix I to this circular
"Offer Date" in relation to an Option, the date (which must be a Business Day)
on which a Participant is offered such Option
"Option" in relation to the New Share Option Scheme, a right granted under the New Share Option Scheme to subscribe for Shares in accordance with the New Share Option Scheme
"Option-holder" a person holding an Option (and, where relevant, includes his personal representatives)
"Option Period" in relation to an Option, the period, which is notified by the Board when making an offer to a Participant, during which the Option may be exercised, such period must not exceed the period of 10 years from the Offer Date of such Option
"Option Price" in respect of any Option granted under the New Share Option Scheme, the subscription price for each Share payable by the Option-holder on exercise of the Option as determined by the Board and notified to an Option-holder in accordance with the Rules
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"Other Scheme(s)" any other share option scheme(s) involving the grant by the Company or any of its subsidiaries of options over new securities issued by the Company or any of its subsidiaries established by the Company or any of its subsidiaries in accordance with Chapter
17 of the Listing Rules or any other share option scheme(s) which is determined by the Stock Exchange to be analogous to a share option scheme as described in Chapter 17 of the Listing Rules
"Participant(s)" any person who is (or will be on and following the Offer Date) an employee (whether full time or part time) holding salaried office or employment under a Contract with an Eligible Entity or is a Director (including executive and non-executive directors) of an Eligible Entity or any adviser, consultant, agent, contractor, customer and supplier of any member of the Group or any Eligible Entity whom the Board in its sole discretion considers eligible for the New Share Option Scheme on the basis of his or her contribution to the Group
"PRC" The People's Republic of China (excluding, for the purposes of this circular, Hong Kong, Macau and Taiwan)
"Pre-IPO Share Option Scheme" the pre-IPO share option scheme adopted on 7 April 2011 prior to the listing of the Shares on the Stock Exchange
"Rules" the rules of the New Share Option Scheme
"SFO" the Securities and Futures Ordinance (Chapter 571 of the Laws of
Hong Kong)
"Share(s)" ordinary share(s) of nominal value of US$0.00000008 each in the share capital of the Company
"Shareholder(s)" holder(s) of the Share(s)
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"Substantial Shareholder(s)" has the meaning as defined in the Listing Rules
"HK$" Hong Kong dollars, the lawful currency of Hong Kong
"US$" United States dollars, the lawful currency of United States of
America
"%" per cent.
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中 國 泰 凌 醫 藥 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

Registered Office Principal place of business in Hong Kong

Cricket Square Unit 1505, 15/F
Hutchins Drive Bank of East Asia Harbour View Centre
PO Box 2681 56 Gloucester Road
Grand Cayman Wanchai KY1-1111 Hong Kong Cayman Islands
4 September 2014

To the Shareholders

Dear Sir or Madam,

The purpose of this circular is to provide you with (i) the details of the New Share Option Scheme;
and (ii) the notice convening the EGM.
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The Company only has the Pre-IPO Share Option Scheme and the Company does not have any other share option scheme. The Pre-IPO Share Option Scheme is an one-off and closed-end scheme. No options can be granted under the Pre-IPO Share Option Scheme after the listing of the Shares on the Stock Exchange. At the EGM, an ordinary resolution will be proposed for the Shareholders to approve and adopt the New Share Option Scheme, which will take effect on the date of its adoption at the EGM subject to the Stock Exchange granting approval for the listing of and dealing in the Shares to be issued and allotted pursuant to the exercise of Options in accordance with the terms and conditions of the New Share Option Scheme.
The purpose of the New Share Option Scheme is to enable the Company to grant Options to the
Participants in recognition of their contribution to the Group.
As at the Latest Practicable Date, the issued share capital of the Company is 1,081,956,500
Shares. Assuming that there is no change in the issued share capital between the period from the Latest Practicable Date to the Adoption Date, the number of Shares issuable pursuant to the New Share Option Scheme on the Adoption Date will be 108,195,650 Shares, being 10% of the issued share capital of the Company.
The Directors consider that it is not appropriate to state the value of all Options that can be granted pursuant to the New Share Option Scheme as if they had been granted on the Latest Practicable Date as a number of variables which are crucial for the calculation of the Option value have not been determined. Such variables include but are not limited to the exercise price, exercise period, lock-up period (if any). The Directors believe that any calculation of the value of the Options as at the Latest Practicable Date based on a number of speculative assumptions would not be meaningful to Shareholders.
None of the Directors is a trustee of the New Share Option Scheme or has a direct or indirect interest in the trustee of the New Share Option Scheme.
With respect to the operation of the New Share Option Scheme, the Company will, where applicable, comply with the relevant requirements under Chapter 17 of the Listing Rules. The rules of the New Share Option Scheme provide that the Board is empowered with the authority to determine the terms and conditions of any Option based in each case on relevant factors as the Board considers appropriate. The Board believes that the authority given to the Board under the New Share Option Scheme to specify any minimum holding period and/or performance targets as conditions in any Option granted and the requirement for a minimum subscription price as well as the selection criteria prescribed by the Rules will serve to protect the value of the Company as well as to achieve the purpose of the New Share Option Scheme.
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The adoption of the New Share Option Scheme is conditional upon:
(a) the passing of an ordinary resolution to adopt the New Share Option Scheme by the
Shareholders; and
(b) the Listing Committee of the Stock Exchange granting the listing of and permission to deal in any Shares which may fall to be issued by the Company pursuant to the exercise of Options in accordance with the terms of the New Share Option Scheme.
Subject to the obtaining of Shareholders' approval with respect to the adoption of the New Share Option Scheme at the EGM, the total number of Shares which may be issued upon exercise of all Options to be granted under the New Share Option Scheme and any Other Schemes must not in aggregate exceed
10% of the total issued capital of the Company as at the date of approval of the New Share Option Scheme unless the Company obtains a fresh approval from Shareholders to renew the 10% limit on the basis that the maximum number of Shares in respect of which Options may be granted under the New Share Option Scheme together with any Options outstanding and yet to be exercised under the New Share Option Scheme and any Other Schemes must not exceed 30% of the issued share capital of the Company from time to time.
A summary of the principal terms of the New Share Option Scheme which is proposed to be approved and adopted by the Company at the EGM is set out in the Appendix I to this circular on pages
8 to 16. A copy of the Rules is available for inspection at the Company's principal place of business in Hong Kong at Unit 1505, 15/F, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong during normal business hours from the date hereof up to and including the date of the EGM.
In accordance with the requirements of the Listing Rules, the Company will publish an announcement on the outcome of the EGM in respect of the resolution relating to the adoption of the New Share Option Scheme on the website of the Stock Exchange.

Application will be made to the Listing Committee of the Stock Exchange for the approval of the listing of, and permission to deal in, the Shares to be issued pursuant to the exercise of the Options granted under the New Share Option Scheme.

A notice convening the EGM is set out on pages 17 to 18 of this circular. The EGM will be convened for the purpose of considering and, if thought fit, passing the resolution to approve the adoption of the New Share Option Scheme.
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As at the Latest Practicable Date, and to the best knowledge, belief and information of the Directors having made all reasonable enquiries, no Shareholder is required under the Listing Rules to abstain from voting on the resolution regarding the proposed adoption of the New Share Option Scheme at the EGM.
A form of proxy for use at the EGM is sent to the Shareholders together with this circular. Whether or not the Shareholders are able to attend the EGM, the Shareholders are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon as soon as possible but in any event not less than 48 hours before the time for holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude the Shareholders from attending and voting in person at the EGM or any adjourned meeting thereof should the Shareholders so wish.

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.

The Directors consider that the proposed adoption of the New Share Option Scheme is in the best interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the relevant resolution to be proposed at the EGM.

The English text of this circular and proxy form shall prevail over the Chinese text in case of inconsistency.
Your attention is also drawn to the information set out in the appendix to this circular.
Yours faithfully
By order of the Board

Chairman

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The following is a summary of the principal terms of the New Share Option Scheme proposed to be approved at the EGM:

The purpose of the New Share Option Scheme is to provide the Company with a flexible and effective means of incentivising, rewarding, remunerating, compensating and/or providing benefits to the Participants.

To determine the eligibility of the Participant, the Board may offer to grant an Option to any Participant who has contribution to the Group to subscribe for such number of Shares at the Option Price calculated according to paragraph 5 below, subject always to any limits and restrictions specified in the Rules.

A Participant shall pay the Company HK$1.00 for the grant of an Option on acceptance of an
Option offer within 21 days after the Offer Date.

Options granted under the New Share Option Scheme are subject to such terms and conditions as may be determined by the Board at its absolute discretion and specified in the offer of an Option, which terms and conditions may include:
(A) vesting conditions which must be satisfied before an Option-holder's Option shall become vested and capable of being exercised; and
(B) the Board may, in its absolute discretion, specify performance conditions that must be achieved before an Option can be exercised and/or the minimum period for which an Option must be held before it can be exercised.
These provisions will give the Board flexibility to impose conditions suitable for fulfilling the various purposes of the New Share Option Scheme. Apart from this general discretion of the Board, the Rules do not contain specific provisions on the minimum period during which an Option must be held before exercise or on performance targets applicable to Options.
Under the New Share Option Scheme, the Directors have discretion to set a minimum period for which an Option has to be held before the exercise of the subscription rights attaching thereto. This discretion allows the Directors to provide incentive to eligible Participants to remain as eligible Participants and thereby enable the Group to continue to benefit from the services and contributions of the eligible Participants. This discretion, coupled with the power of the Directors to impose any performance
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target or other restrictions as they consider appropriate before the Option can be exercised, enable the Group to provide incentives to the Participants to use their best endeavours in assisting the growth and development of the Group. Although the New Share Option Scheme does not provide for the granting of Options with rights to subscribe for Shares at a discount to the traded prices of the Shares on the Stock Exchange, the Directors are of the view that the flexibility given to the Directors in granting Options to the Participants and to impose minimum period for which the Options can be exercised, will place the Group in a better position to attract human resources that are valuable to the growth and development of the Group as a whole.

The Option Price will be determined by the Board at its absolute discretion and notified to an
Option-holder. The minimum Option Price shall not be less than the highest of:
(A) the closing price of the Shares as stated in the Stock Exchange's daily quotations sheet on the Offer Date;
(B) the average closing price of the Shares as stated in the Stock Exchange's daily quotations sheets for the five Business Days immediately preceding the Offer Date; and
(C) the nominal value of the Shares.

6.1 Subject to the limits referred to in paragraphs 6.2, 6.3 and 6.4, the total number of Shares which may be issued upon exercise of all Options to be granted under the New Share Option Scheme and any options to be granted under any Other Schemes must not in aggregate exceed 10% of the aggregate of the Shares in issue as at the date of approval of the New Share Option Scheme.
Options lapsed in accordance with the terms of the New Share Option Scheme and any Other
Schemes will not be counted for the purpose of calculating the 10% limit in this paragraph
6.1.
6.2 With the approval of the Shareholders in general meeting, the Board may "refresh" the
10% limit under paragraph 6.1 (and may further refresh such limit in accordance with this paragraph) provided that the total number of Shares which may be issued upon the exercise of all Options to be granted under the New Share Option Scheme and any Other Schemes under the limit as "refreshed" shall not exceed 10% of the Shares in issue as at the date on which the Shareholders approve the "refreshed" limit.
Options previously granted under the New Share Option Scheme and options granted under any Other Schemes (including those outstanding, cancelled and lapsed in accordance with the terms of the relevant scheme, or exercised options) will not be counted for the purpose of calculating the limit as "refreshed".
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