Royale Home : ADOPTION OF PERFORMANCE SHARE AWARD PLAN

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ROYALE HOME HOLDINGS LIMITED

皇 朝 家 居 控 股 有 限 公 司*

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1198)

ADOPTION OF PERFORMANCE SHARE AWARD PLAN

The Board has adopted the Performance Share Award Plan on the Adoption Date, in which Eligible Persons will be entitled to participate. The purpose of the Performance Share Award Plan is to recognise and reward the contribution of the Eligible Persons to the growth and development of the Group through an award of Shares.

The Administration Committee may at any time notify and instruct the Trustee to

1. purchase Shares on the Stock Exchange at such price range as the Administration Committee deems appropriate; and/or (ii) subscribe for new Shares to be allotted and issued by the Company to the Trustee under mandate(s) granted by Shareholders at general meeting(s) of the Company.

The total number of Shares held by the Trustee under the Performance Share Award Plan will not exceed 5% of the total issued Shares on the Adoption Date. Subject to any early termination pursuant to the terms of the Performance Share Award Plan, the Performance Share Award Plan will remain valid and effective for a period of 5 years commencing from the Adoption Date.

The Performance Share Award Plan is not subject to the provisions of Chapter 17 of the Listing Rules and is a discretionary scheme of the Company.

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The Board has adopted the Performance Share Award Plan on the Adoption Date. A summary of the principal terms of the Performance Share Award Plan is set out below:

PURPOSE OF THE PERFORMANCE SHARE AWARD PLAN

The purpose of the Performance Share Award Plan is to recognise and reward the contribution of certain Eligible Persons towards the growth and development of the Group through an award of Shares.

The Performance Share Award Plan is not subject to the provisions of Chapter 17 of the Listing Rules and is a discretionary scheme of the Company.

ADMINISTRATION

The Performance Share Award Plan shall be subject to the administration of the Administration Committee in accordance with the rules of the Performance Share Award Plan. The Administration Committee is delegated with the power and authority by the Board to administer the Performance Share Award Plan. The Administration Committee comprises senior management of the Group. Mr. Tse Kam Pang and Mr. Yang Jun, both being executive Directors, have been appointed as initial members of the Administration Committee as at the date of this announcement.

PARTICIPANTS

The Administration Committee may, in its absolute discretion, make an award to any full-time employee of the Group, including directors, executive, officers or senior management of the Group. Notwithstanding the foregoing, in no event shall awards be made to Directors or the chief executive officer of the Company.

The eligibility of any of the Eligible Persons to an award shall be determined by the Administration Committee from time to time on the basis of its opinion as to the Eligible Persons' contribution towards the development and growth of the Group and with reference to factors including integrity (including criminal or compliance background) or employment status with the Group of such Eligible Persons.

The Eligible Person(s) the selected ("Selected Person(s)") for awards shall be individual employee(s) excluding Directors and the chief executive officer of the Company.

AWARD OF SHARES

The Administration Committee shall, subject to and in accordance with the provisions of the Performance Share Award Plan, be entitled (but shall not be bound) to, at any time during the continuation of the Performance Share Award Plan, make an award to any of the Eligible Persons of such number of issued Shares, fully paid or credited as fully paid, as the Administration Committee shall determine pursuant to the Performance Share Award Plan. Notwithstanding the power of the Administration Committee, the Remuneration Committee is delegated with an overriding power in determining or supervising the making of any award under the Performance Share Award Plan.

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In the event that a Selected Person or his/her associate(s) is a member of the Administration Committee, such person will abstain from voting on any approval by the Administration Committee of an award of Shares to such Selected Person. The Board may by resolutions appoint any one or more senior management of the Company as authorised representative(s) to give instructions or notices to the Trustee on all matters in connection with the Performance Share Award Plan and other matters in the routine administration of the Trust.

POOL OF AWARDED SHARES

Upon the receipt of an award notice, the Trustee shall set aside the awarded Shares provisionally awarded to the Selected Person to whom such award notice relates pending the transfer and vesting of the awarded Shares to which such award notice relates. The Trustee shall hold the awarded Shares so set aside during the vesting period on the terms of the Trust Deed. The Trustee may, at any time during the continuation of the Performance Share Award Plan and the Trust Deed, purchase Shares from the stock market and/or subscribe for new Shares to be issued and allotted by the Company to the Trustee; and/or set aside the appropriate number of award Shares out of a pool of issued Shares held by the Trustee pursuant to the Trust Deed.

The Company may use mandate(s) granted by its Shareholders at general meeting(s) of the Company for the issuance and allotment of new Shares to the Trustee for the purpose of satisfying awards made under the Performance Share Award Plan. Application(s) will be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, any award Shares issued and allotted pursuant to the mandate(s) which may fall to be issued and allotted by the Company under the Performance Share Award Plan.

When a grant of award is proposed to be made to an Eligible Person who is a connected person of the Company and the outstanding awards are to be satisfied by issuing new Shares to the Trustee, the Company will comply with the applicable requirements under Chapter 14A of the Listing Rules (including independent Shareholders' approval, if required).

SATISFACTION OF AWARDS UNDER THE PERFORMANCE SHARE AWARD PLAN

Subject to the restrictions as set out in the paragraph headed "Restrictions on the time of making awards and/or vesting", the Administration Committee may at any time notify and instruct the Trustee to (i) purchase Shares on the Stock Exchange at such price range as the Administration Committee deems appropriate; and/or (ii) subscribe for new Shares to be allotted and issued by the Company to the Trustee under mandate(s) granted by Shareholders at general meetings of the Company.

The Directors shall procure that adequate funds are paid out of the Company's resources to the Trustee to enable the Trustee to purchase the appropriate number of Shares and/or subscribe for new Shares in order to satisfy the outstanding awards from time to time made under the Performance Share Award Plan.

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RESTRICTIONS ON THE TIME OF MAKING AWARDS AND/OR VESTING

For so long as the Shares are listed on the Stock Exchange, no award may be made or vested (regardless of whether with the consent of the Board, the Administration Committee or the Remuneration Committee or not), and no instructions to acquire Shares shall be made, (1) after a price sensitive event has occurred or a price sensitive matter has been the subject of a decision, until such price sensitive information has been made available to the public domain in accordance with the requirements under the Listing Rules or (2) during blackout periods for directors' dealings under the model code set out in Appendix 10 to the Listing Rules or (3) in any circumstance which is prohibited under the Listing Rules, the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong) or any other laws or regulations or where any requisite approval from any governmental or regulatory authority has not been granted.

VESTING OF AWARD SHARES

Subject to restrictions as set out in the paragraph headed "Lapse of awards", the Trustee shall transfer to and vest in any Selected Person(s) the legal and beneficial ownership of the awarded Shares to which such Selected Person is entitled under the relevant award and all the Other Distributions (as defined below) attributable to such awarded Shares within 10 business days after the latest of:

1. the earliest date on which the Trustee may vest the legal and beneficial ownership of the awarded Shares with the relevant Selected Person as specified in the award notice;
2. the date on which the condition(s) or performance target(s) (if any) to be attained by such Selected Person as specified in the related award notice have been attained and notified to the Trustee by the Administration Committee in writing; and
3. where applicable, the date on which the Trustee has completed the purchase of Shares and/or subscription of new Shares to be issued and allotted by the Company for the purpose of making the relevant award.

The Selected Person(s) shall only be entitled to exercise all voting rights in the awarded Shares upon such awarded Shares being transferred to him/her.

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